Donna Ryun, Information Services
By far the most popular questions I’ve received this month concern fuel surcharges and freight rates.
With fuel prices way up and no end in sight, truckers are hurting and looking for ways to keep from going under. A fuel surcharge is the fairest way for truckers as well as shippers to cope with fuel price spikes, and better freight rates sure couldn’t hurt. The trouble is that some people just don’t play fair, and owner-operators are once again getting the short end of the stick. Here’s an example of the questions coming in:
Question: These high fuel prices are killing me! Isn’t there a law that says I should be getting a fuel surcharge? What’s it gonna take for me to see it in my settlement?
Answer: At press time, there is no mandatory fuel surcharge law, but OOIDA is working on it. We’ve pushed for fuel surcharge legislation for the past few years, and we’ll keep pushing for it until we get some relief for small-business truckers.
Shippers know something (or someone) has got to give when fuel prices spike, and they expect to pay surcharges during these times ... the same as they expect them to disappear once prices go down again. That’s only fair.
Still, small-business truckers who run under their own authority have found it difficult to convince many shippers or brokers to pay or charge their customers a fuel surcharge. What’s more, it seems to be common practice for unscrupulous middlemen to pass along only a small portion (if any) of the surcharges collected to the truck driver who actually paid for the fuel. That’s not only outrageous; it’s just plain stealing.
The customers who are billed for these fuel surcharges have been led to believe it’s the cost bearer who will get the money to help reimburse him/her for the added transportation expense caused by higher fuel prices. I’d call it no less than fraud when it is skimmed off by the middleman instead of passed through to the person who paid for the fuel.
Lawmakers need to be aware of this practice and to take action to prevent it from continuing to hurt small-business truckers.
What’s it gonna take? OOIDA recently issued a national call-to-action urging its members and other truckers to let their lawmakers know action is needed now. You should tell them that mandatory fuel surcharge legislation that includes a 100 percent pass-through to the cost bearer is needed now, and ask them to support it. Your grassroots efforts will be what it takes to get the job done.
Question: What’s it gonna take for freight rates to go up so I can make some money?
Answer: Everybody’s in business for a variety of reasons these days, but the most prevalent one is to make money. I’m not just talking about breaking even … I’m talking about making a profit.
While your bottom line couldn’t mean less to load brokers concerned about their own numbers, it sure means the world to you. That’s why you have to take charge of it.
Whenever the issue of rates is discussed in trucker conversations, one line keeps coming up: “Don’t haul cheap freight.” If no one hauls cheap freight, rates will have to increase. You own the truck, and you operate your own business with all the responsibilities and expenses that go with it. That makes you the boss, so you should determine the rate you need to make a profit for your business.
Sure, you’ll have competition, so you’ll have to be smart, but remember: Those who consistently sell their services for rates that fall below their expenses will not be in business a few months (or even weeks) down the road.
In addition, truckers who haul cheap freight are easy marks. They are treated no differently than the geeky kid in school that agreed to do everyone’s homework in order to be popular for a day. Remember where he usually ended up? That’s right … head first in the garbage can or locked up in his own locker by the very person he thought he was helping.
Just like that kid we all remember, truckers who agree to haul cheap freight are the same ones who end up sitting at the dock for hours, waiting to be loaded, without the courtesy of being allowed to even use the consignee’s restroom, nearly out of hours but afraid to move, no negotiated detention time, no profit, no respect and no clue as to how they are hurting themselves, as well as their fellow truckers.
Being a business owner is tough, and owning a trucking business is even tougher. You have a right to expect to gain something for all your hard work. Negotiate for the rates you want and deserve. Refuse to allow yourself to be fooled into performing a service that was not agreed upon. If that legal load you agreed to haul ends up being an overweight, oversize, “hot load” that could not only put you out of compliance, but also threatens your safety, let it sit.
What’s it gonna take to raise rates? It’s gonna take you and other small-business truckers who finally decide to stick together to make it happen. It’s your business, and you have the control to determine your future. OOIDA will do everything it can to help you succeed, but this is one problem that can’t be solved without your determined involvement.
If you have questions that you’d like answered, please e-mail them to firstname.lastname@example.org or send them to me at PO Box 1000, Grain Valley, MO 64029. Although we won’t be able to publish all questions in Land Line, you will receive a response.