Protecting our profits from obscene toll hikes
I learned today something about New York mileage tax and fuel tax that I did not know before and that may work to our benefit. Learned by visiting with a trucker friend who filled me in.
Diane and I drove overnight on a load that we picked up yesterday morning in Florida and delivered at noon today in Western Massachusetts. Having been off the road for a while, it was nice to find ourselves slipping easily back into the groove.
Our fellow BCO’s (Landstar contractors) tell us that this area is hit or miss when it comes to getting freight out. Today it was a hit. Before we delivered, we were dispatched on a 3,000 mile run that picks up on Friday. Our friends have been telling us that business has been good in recent weeks. Two runs do not a trend make but we’re off to a great start.
The mileage and fuel tax conversation came up when a trucker friend and I were complaining to each other about the toll increases that took effect on January 1, 2012. The New Jersey Turnpike Authority, for example, increased tolls 50 percent (50 percent!!!!). It is not easy to track them all because there are a number of tolling authorities in the Northeast and no two classify trucks the same way.
New York state was mentioned to my friend because Diane and I drove through it to get to today’s delivery. It was a route quite different than we used to take but the toll hikes prompted the change. It was cheaper to drive an extra 40 miles and thereby avoid tolls.
The size of these toll hikes is obscene. We will not pay them if there is a way to avoid them. Additional price discipline is needed to make sure that our customers customers pay the additional cost of the these tolls or extra miles, not us.
Truckers, that last point is of vital importance. It will take the shipping community a while to adjust to the higher toll costs but you must pay them today. Shippers will resist paying more at all. That is the nature of the game. But if you do not stick to your pricing guns, the money you hand to the toll collector at the booth (or to the tolling authorities through EZ-Pass) is the worst money you give away. It is your margin, money you would otherwise keep as profit.
I don’t want to share the mileage and fuel tax details my friend shared with me just yet because I am not clear on them myself. I need to call our carrier’s fuel tax department to get the full story. More on that tomorrow.