Well, we're still at it (trucking that is). We purchased our first truck in March of last year. Boy have we learned a lot by becoming owner operators. The trucking companies make a lot of money off of us. For example: they bill their customers a fuel surcharge and then find very creative ways to keep as much of it as they can for themselves. Some companies take a long time before they give us our fuel surcharge. In other words, they get it right away and then hold on to the surcharge for their own use. The impact on us is that we pay today's diesel price and as a result our settlement statement is a lot less than had we received the fuel surcharge right away. That hurts because when you are a small outfit you need all of your income. Other companies reimburse you the surcharge on a state to state basis and then turn around and charge their customers the Department of Energy's (DOE) average cost per gallon. The difference can be substantial and is also very difficult to determine. Yet other companies only update the average cost per gallon for owner operators on a monthly basis and yet charge their customers the DOE's weekly updated version.
Another thing our current company does (they shall remain nameless because Lord knows what kind of trouble we would get into if we name them) is offer up our vehicles for exclusive use to some of their most valued customers. That offer means that the customer gets to use our vehicle exclusively. They get to hold us for as long as they wish. They have to pay a higher fuel surcharge to the freight company, sometimes as much as 100% more. Of course, the freight company does not pass that along to their owner operators (O/O). We still get that same old fuel surcharge that is calculated on a state by state basis.
Imagine the profit to the freight company if the fuel surcharge (FSCH) on a given Monday is at $.34cpm. Here is an easy way to figure this out. Lets use as our example one O/O and come up with a figure for the total 100. Here goes:
One O/O (solo) runs approximately 2000 miles (low ball) for say 48 weeks. That comes to: .34 times 2000 = $680 in FSCH. Now, lets multiply that amount by 100 (the number of O/O leased to the freight company). That comes up to $68,000. Now lets continue on with our little scenario. If you times $68,000 by 48 weeks you get a running total of $3,264,000. That averages out to $32,640 per O/O per year. That is what they pay their O/O in FSCH. But, we can't forget that that is not what they are charging the customer. They are in fact charging the customer $.70. What that means is that they are in fact keeping $3,264,000. My God! What a profit. And all of this because we are leased on to them. And who said truck drivers are dumb?
Well, we know the issue, but I don't know what we can do about it. Last year legislation was presented to ensure that O/O received all of the FSCH collected by the freight companies. That legislation did not make it because it was said it would allow too much government intervention. Unfortunately, this is true. But as truckers we are really struggling and need every penny we have earned. I think that in this case, government interventions is definitely needed.
Well, I'm getting ready to go. I plan on purchasing a digital camera and will post pictures to this blog. Of course I will have to figure out how to do this as I am 50 years old and this stuff is really hard for me. You can't imagine the time I had in getting this blog up and running. It took me a year to remember that I had started it:).
Talk to you all soon (actually no one has even looked at my blog). Nonetheless, I'm going to keep on.
