Symposium panel discusses surcharges, driver pay

| May 24, 2012

Motor carriers have not always done a good job explaining their costs to shippers. But now that the tables have turned, shippers are willing to listen, said a panel of fleet executives at the CCJ Spring Symposium in Birmingham, Ala., on Wednesday, May 23.

Negotiating weekly adjustments to fuel surcharges is one example. Panelist Brent Nussbaum, president and chief executive of Nussbaum Transportation Services, a 200-truck carrier based in Normal, Ill., dispatched the company’s chief financial officer on sales calls to explain the fuel surcharge. Nighty-eight percent of the company’s fuel surcharges now are adjusted weekly instead of monthly or quarterly, he said.

Panelist Gary Lewis, president of Pendulum Shift Consulting, said shippers and carriers still are not spending enough time talking about a fair fuel reimbursement — one that is lane-specific with a daily reset. Discussions with shippers and carriers about the topic typically will last between four and six hours, he said. During the first two hours, shippers think carriers are trying to gain the upper hand.

“Then they realize that this creates an environment where you are reimbursed for exactly what you purchased,” he said.

Besides fuel, panelists agreed that educating customers about the need to increase driver pay and utilization is bearing fruit. “Shippers are coming around and helping us be more efficient,” said Steven Tapscott, vice president of sales and marketing for Miller Transporters, a 400-truck chemical hauler located in Jackson, Miss.

Shippers are being more flexible with scheduling and allowing carriers to set appointment times for pickup and delivery. “They can’t afford to spend more money — they are all operating on minimum profit, but are cognizant of what is happening,” he said.

Developing a custom yield management system has helped Nassbaum Transportation target specific lanes for pricing adjustments. “It allowed us to give criteria on all of the lanes instead of saying we need a 3 to 5 percent rate increase,” Nassbaum said. “We started attacking lanes and improving yield every month.”

Nassbaum has focused on growing with existing customers in the last couple of years. “We’ve gone back and explained the value we bring to them,” he said. The company also sends monthly e-mail blasts to customers to keep them informed of the company’s Compliance, Safety, Accountability scores and safety initiatives.

Adding more capacity to absorb growth has been the difficult part of the equation, however. “Banks are still a little bit bitchy about proving finance to this industry,” he said.

Nassbaum mentioned a successful project that has increased its market share with a customer. Working with Wabash, the company designed a new dry van trailer with a 35,000-pound heavy-duty floor rating (see “One Trailer, Two Loads,” CCJ February 2012).

The HD35 trailer can support a 15,000-pound steel coil loaded with a 20,000-pound forklift. The design solved the problem of moisture damage and inconsistent pricing for a customer with inbound flatbed shipments of steel coil. Flatbed carriers were charging for deadhead mileage since the customer was shipping its outbound finished product in dry vans.

“It completely eliminated the moisture issues, gave consistent pricing and took two modes of transportation and turned them into one,” he said.

  • Marty Marsh

    This is some funny stuff,I love to read rant about nothing.I have heard of trucking companies saying they haven’t had a rate increase since deregulation,well we all know that is a lie just because of the price of fuel.Then when the fuel surcharge came about no one caught on to what they where doing and I’m still not sure anyone gets it.But with the fuel surcharge that was an automatic rate increase minus drivers pay,which is why that was done that way to begin with.So if insurance would go thru the roof there would be a insurance surcharge.But you will never see a driver surcharge.These trucking companies thought they where going to have people living in there trucks for expense money and everyone would be happy.They chase all of the experienced drivers out of the business with that tatic and now they have to pay for more expensive trucks that tell the rookies it’s time to wipe they’re butt,so what did they gain.
    The crew at ATA thought they had this one all figured out.Yeah a kids eye’s get all wide when you ask them if they want to be a truck driver.But after the training session is over and they are running all over the USA and haven’t been home for 2 months and they have spent their big pay check living on the road,even the stupid ones say,what am I doing.
    I have come to the conclusion that everyone thinks that everyone else is stupid.But,if confronted with the facts just use the ole stand-by,lie untill you have to just walk away.
    I for one can’t think that way,I figure if I know it everyone must know it,but not them.
    I’am the only one that reads this stuff,ain’t I?Wats up wit dat?

  • Marty Marsh

    Sorry but I left something out.
    Shippers and recievers are some of the biggest problems that trucking has.All of the detention time that isn’t paid,makes you want to run right back and grab another load for them.The one’s that I really like the most is the ones that keep you there for 1 hour and 45 minutes and then unload you in 15 minutes.That is harassment,just because the first 2 hours are free alot of them will do that every time.Of course the ones that do this are the ones it use to take 24 hours or more to get unloaded,so now they can’t use your tailer as part of their warehouse they are pissed off.
    But it all comes down to screwing the driver and no one else.

  • http://overdriveonline.com/channel19 Todd Dills

    Marty it sounds to me as if the fleet reps above are sort of getting back to the whole notion of the surcharge being what it should be, i.e. a method of exact reimbursement? Rates and driver pay it sounds like they’re at least working the shippers for more, eh?