Fuel prices top owner-operator challenges

| July 30, 2012

Using a survey and our social media channels earlier in the year, we quizzed readers about what they saw as the No. 1 problem for owner-operators.

Stay tuned to Overdrive this month for examinations of the top five, also featured in our August magazine. (Also, over on the Channel 19 blogOverdrive Senior Editor Todd Dills is sharing further reporting from his expansive interviews for the package.) 

Following find an examination of and some partial solutions to your named No. 1 problem, fuel prices, from owner-operators, fleet representatives and others.

1. Fuel prices

Diesel prices first topped $4 a gallon in 2008, concurrent with that year’s dramatic freight downturn. Some owner-operators were simply “costed” right out of business. Many of those had been leased to carriers without fuel surcharge programs or whose rates weren’t adjusted often enough to compensate for the dramatic increases.

While fuel surcharge programs are more entrenched in today’s industry, owner-operators still rank fuel pricing as their number one problem. Here are steps to help manage your fuel costs:

 

Ensure that you’re getting a fair fuel surcharge.
Avoid brokers and carriers whose rates don’t adequately compensate for fuel. If you’re independent and lack a fair surcharge, explain the situation to your shippers and negotiate a program. Fuel surcharges should increase or decrease proportionally with diesel prices, either on a cents-per-mile basis or as a percentage of the rate the customer pays the carrier for the load.

Six-truck small fleet owner and part-operator Tom Blake survived the 2008 crisis by sitting down with a few select shippers near the end of 2008 and renegotiating his contracts to include more frequently updated fuel surcharges.

“It’s based on the weekly Department of Energy average,” he says, available via EIA.gov and published at OverdriveOnline.com as well. His fleet’s average fuel mileage is 5.5 mpg.

Blake hauls container freight around the Kansas City, Mo., region. He offered customers different forms of the surcharge for local and longer regional hauls, as there’s a significant fuel-mileage difference.

“All I was doing was trying to keep my customers happy,” Blake says, recalling the tough 2007-08 period. “When I started looking at the books, I was just like, ‘Oh man, I’m killing myself.’ If you’re not paying attention to what things are costing you, you’re going to leave a lot of money on the table.”

  • http://www.facebook.com/don.lanier1 Don Lanier

    A few Hundred dollars here, a few hundred dollars there, add some more EPA regulations, change from Diesel to NG, A few thousand dollars, some added license fees and on and on and pretty quick, WHAT ARE YOU TAKING HOME AT THE END OF THE DAY, AND WHAT IS THE GOVT MAKING OFF YOU.

  • Paul Brown

    Fuel prices are going to stay high as long as we still have the dumbo in Wash. He really doesn’t care about how much money we put out for fuel because the big oil companies are laughing all the way to the bank. When he took over after George W. the gas and fuel prices were about $ 1.69 or there about, as long as he is in we will never see that again. He has to go. I have gained a little better mileage by using Amsoil synthetic oils and extended my drains out and get about a 6.50% increase, I’m saving money on drains and better protection and better performance in the long run. We have to do everything we can to increase our mileage and save some $$$.