DOT Alcohol and Drug Test Results Release Form

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Is The High Price Of Diesel Fuel Passed On To Consumers?

First, most big trucks run on diesel fuel, commonly referred to as just "fuel." Second, fuel cost is (or should be) figured into any good business plan when fuel is consumed in the course of doing business, but fuel is not a fixed price. When you sell widgets, and it takes one thingamajig per widget, you can account for that and price accordingly. But, in trucking, it's more complicated than that. Fuel price fluctuates throughout the day, not just the week or month. MPG, or how much fuel is burned per mile, also varies with other variables such as wind, temperature, load weight, length of haul, time length of shipment, whether the load is refrigerated or not, driver pay, as well as other variables. Shipping rates are usually set in what's called a Tariff. That's a trucker contract where the trucking company agrees to haul loads from A to B for either a flat rate or a rate per mile. These are in place so that no negotiation has to take place for each shipment. The shipping department of the manufacturer simply calls the trucking company and asks if the trucker has "capacity", or the ability to haul another load. If so, then the load or order is "booked" and appointment times are set for loading and subsequently for delivering. But what about when the price of fuel jumps up $.15 in a week? The trucking company has already figured fuel prices to be around $2.00 per gallon, and now they have to pay $2.15 per gallon. That cuts into the truckers profits, which are normally $.01 to $.20 per mile.

Now the trucker is not going to work for no profit, but the shipper doesn't want to put a shipping clerk in charge of negotiating shipping rates on every shipment, so both companies agree on a "fuel surcharge" schedule. These are typically laid out like so... The base price of fuel is set at, let's say, $2.00 per gallon. An avg MPG is stated: let's say 5 MPG. Then a table is laid out stating how much $ per mile will be added as a fuel surcharge for each $ increase (and sometimes decrease) in the price of fuel. So maybe for every $.05 increase in fuel price, $.01 is added to the rate per mile for shipping. Still with me?

So the truckers get extra $ when the fuel price goes up, but how much? Look at the table: for every $.05 increase in fuel price, $.01 is added to the shipping rate. So the trucker says they paid $2.50 for fuel, and the shipper says "no way! It was only $2.04 here." Argument ensues, and they finally decide that the fuel prices should be based on the average price paid by all fuel purchasers for that period. Fine, but wait....How do you figure an average? During the period... or after the period, when you have all the data? Right, after the period is over. So fuel goes from $2.00 to $2.05 in a week. The trucker ends the week buying fuel for $2.05 per gallon. Starting next week, the average price of diesel fuel will be $2.025, so according to the fuel surcharge schedule, the trucker does not get any increase becuase the fuel price has not yet gone up a full $.05. No biggy, right? Keep hauling and quit whining!

Now fuel for this week goes from $2.05 to $2.10. Next week the average will be released from the Department of Energy saying it was $2.075, the trucker will be paying $2.10, and he'll bill a fuel surcharge of $.01. See where this is going?

In my opinion, truckers who rely on fuel surcharges to keep them profitable are allowing their customers to set their rates. I'd love to go to Walmart and tell them I know how much it costs to make a DVD so I'm only going to pay a few cents more than that. This is what trucking companies are allowing when they accept fuel surcharges as quick fixes to long term problems.

In the end, the fuel cost is passed along. But that's only after shippers use up all of the truckers who don't know exactly what they should be charging per mile (every day) to haul a load. Once those truckers are all used up and have had to give up their truck(s), the truckers who watch their bottom lines closely will still be in business, will be in higher demand (because of lowered capacity from other truckers going out of business), and will haul loads for the highest bidder. Those high bidders will have to absorb or pass on that cost to the consumer in the end, but it will be 6 months to a year before the real punch is felt by consumers. IF you want to know how the economy is going to be doing in 6 months, look at the trucking sector today.

The GPS Bait and Switch: Trucking Gets Tricked

The FMCSA has recently decided to start using GPS reports, such as those provided by Qualcomm, to start validating the accuracy of driver logs. Despite issuing a statement in the late 1990's saying that the FMCSA would never use a trucking company's electronic tracking data against them, that is exactly what the FMCSA is doing in recent audits.  Money must be tight in Washington. Since the introduction of the 14 hour clock and 34 hour restart in the hours of service rules for truck drivers, fleets have been looking for a way to run legally while still turning a profit. Not many fleets have found a way to comply with the HOS laws and still stay in business. For those of you not familiar with the hours of service laws for truck drivers, let me give you an example of how silly they are. Once a truck driver performs ANY work, driving or not, his 14 hour clock starts ticking, and he can not work any more until he has had a 10 consecutive hour break. So check out this scenario that happens every day... A driver is parked at a customer's location, waiting for the customer to open up and unload the goods the driver has brought to them. It's typically around 4 or 5 am when this happens. The customer knocks on the trucker's door and wakes him up, and asks him to back into door #4. Tick tick tick, the clock has begun. It takes 15 minutes to back into the door, open the trailer doors, chock the wheels, and then the driver goes back to sleep. Four hours later, another knock on the door, and the driver is told the customer is done unloading his trailer. The driver calls his company and is told to drive 30 minutes down the road to another company who will load his trailer with another load that delivers tomorrow at 8 AM, 500 miles away. The driver goes to the next location, pulls in and waits to be loaded. An hour later, he is told to back into door #3. Four hours later, another knock, and he's off to the races. Now the driver has done 2 fifteen minute periods of moving his trailer around the customers' facilities, and one half hour of driving, and has slept in his truck for two 4 hour spans while waiting for his trailer to be unloaded and then reloaded again. The truck driver then drives toward his destination, but stops at the truck stop for two hours to refuel, eat, and shower. He now has 3 hours left is his 14 hour clock, and has 500 miles to go. The driver would have to drive 167 miles per hour to make it to the destination within the 14 hour clock. So the driver has had 8 hours of sleep, and is forced to sit for 10 more hours before he can legally drive his truck again, and he is supposed to be 500 miles from where he current;y is. He also gets paid by the mile, and not for sitting in the truck. What would you do?

Most people think they'll just drive until they get tired, which will let them get to their destination on time. And that is what most truckers do...ignore the law, and lie on their logs. Enter GPS. With GPS systems like Qualcomm on board the drivers trucks, the FMCSA audits the trucking companies for the previous six months, and uses the GPS dates and times to verify that when a driver said he was in XXX, he was actually in XXX. So driver's can't lie anymore, and the goods you and I depend on will be there when the government says, not when you and I want them.

Some people say that these rules are necessary to keep the roads safe. This author agrees that some rules are required to keep the roads safe, but that ALL vehicles have the potential to cause injury, not just the ones being driven by PROFESSIONALS.

The truth is, it's not about safety at all! It's about MONEY! A Nebraska based trucking company was recently audited by the FMCSA. Upon completion of the audit, the auditor did not find any fineable violations. The later auditor returned to redo the audit stating that her boss told her that there had to be something they could be fined for. After re-auditing the company and finding several violations that the company could be fined for, the auditor left.