O/O challenges: More solutions to high fuel
As promised in my feature in this month’s magazine running down the top challenges for owner-operator businesses in today’s environment, which began online yesterday as a five-part series, I’ll be sharing over the next couple weeks several outtakes from interviews. Today, we’re looking at the No. 1 problem you named in our polling and surveying on the issues earlier in the year: Fuel prices. They’ve been back on an upward trend the past four weeks after a brief fall. No better time to do it, eh? Here are selections from what my sources had to say about dealing with fuel prices:
Owner-operator Jeff Clark
I don’t view fuel prices as a huge problem. They require constant efficiency. The more efficient you are, the more you will be rewarded.
Truth about Trucking proprietor/fuel hauler Allen Smith
There’s no doubt that the price of fuel is on everyone’s radar. The biggest problem that many face is how create a formula to create a net profit. People still have these numbers in their head — $1.50/mile, $2.00/mile, $1.00/mile. etc… You have to figure out all your costs and go from there, whatever you choose — surcharge or rate adjustment, it just has to be part of your business formula and design.
Personally, I see the Fuel Surcharge Index tool as an excellent way to incorporate a surcharge into your rates, as it takes into consideration daily and not weekly fuel costs.
Smith went on to note that he sees “natural gas in the future” powering a great deal more of heavy-truck transport around the nation, referencing the big partnerships of Navistar and Pilot Travel Centers, among other such partnerships elsewhere in the industry, to boost availability of NG powertrains and fueling infrastructure.
And efficiency, of course. Many fuel additives are available to improve mileage as well as aid in burning cleaner. Reduce idling (when appropriate for the driver), keep up with maintenance, don’t speed, and [for carriers] have well-trained and well-paid drivers. If you take care of your employees, your employee will take care of you.
Schneider National’s Mike Bethea, direct of the owner-operator program
We offer discounts and cost-plus fuel at some of those [chain truck-stop] locations. As an owner-operator, you have to take advantage of those kinds of programs. We all know [price] will go back up, and you can almost follow those spikes in fuel prices and bankruptcies — fuel starts to pass the truck itself as owner-operators’ biggest cost. If you’re getting less than 6 mpg — that’s the minimum acceptable level — if you get less than that you’ve got to have your truck paid off.
A lot of [Schneider owner-operators] have gotten APUs, but we’re also starting to see the environmental laws in states creating a problem because they don’t allow the use of diesel-powered APUs. On these newer Freightliners, we’re getting onboard in the coming year with a newer technology, an electrical system that runs the AC and heats the coolant form the engine [powered solely by batteries]. It works well through that 8-to-10-hour period.
The other thing is the whole natural gas phenomenon — we have some units ourselves that we’ve put on. They’re running all over… They’ve performed very well with lower emissions. That’s the kind of change … that’s necessary, and we may not ultimately have a choice. The first part of some of these tests are very promising.
Owner-operator Don Lanier, leased to expediter J.D. Clark Logistics
It’s tough. At four bucks a gallon it’s hard to watch those numbers spin and the totals be hundreds of dollars. We do get a fuel surcharge built into our trips, though.
I’d like to see some teeth given to the Commodities Futures Trading Commission, which regulates energy futures, but I’m also looking forward to CNG trucks. I will buy one…
I do use perks cards, and an OOIDA Truckers Advantage Fleet One card saves me money at the pump.
Landstar Chief Safety and Operations Officer Joe Beacom
Landstar’s support of its [Business Capacity Owners, or BCOs] relative to fuel is a two-pronged and historically effective approach.