Burning Away Higher Pay

A year ago, the industry was fretting that the new hours-of-service rule would hurt productivity and therefore require more drivers. So major carriers rang in the new year with pay increases. As the economy improved other fleets chimed in, adding sign-on bonuses as high as $7,000. Now there’s talk of further pay increases.

Spoiling this lavish attention from your new suitors is the cost of fuel. After staying about $1.50 during 2003, prices began climbing in January. Now that we’ve lived with $2-plus diesel since Sept. 27, it’s beginning to seem normal. Economists say there’s no reason to believe it won’t go higher.

If you jump carriers for a bonus or a few more cents a mile but in the process lose a healthy fuel surcharge, you could be cutting your throat. You’d be like the rash homeowners who took advantage of the 1970s real estate boom. Delighted that their $25,000 house would suddenly fetch $75,000, these sellers were shocked to see how little they could afford once they became buyers.

As we pointed out in our October cover story, fuel surcharges are more important than ever. Understand how your carrier’s surcharge works and make sure it’s fair. Independent operators should at least ask for a surcharge. If that’s a pipe dream, carefully choose loads that pay enough to cover expensive fuel or haul for a larger carrier that will pass along a
surcharge.

For business-related new year’s resolutions, you could do a lot worse than these. Attention paid to fuel costs will mean a big difference in your 2005 bottom line.
–Brad Holthaus

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