AboutJim Bowers Expertise Expertise in U.S. Trucking Industry, Solution Development, Pricing issues, Bid process, Negotiations, Costing and Pricing information systems.
Experience 30 years.
LTL, TL, and Dedicated Pricing programs, Activity Based Costing, Cost modeling.
Council of Supply Chain Management Professionals
Organizations Council of Supply Chain Management Professionals, Roundtable Officer.
Question Is there any regulation at all(mandatory) pertaining to paying a fuel surcharge by the shipper to the trucking co. and then being passed on to the owner operator? Also is there anything that can be done if the trucking co. keeps the fuel surcharge with out providing an alternative fuel source i.e. less fuel cost?
Answer Richard, Pre 1980 when the industry was regulated there was a provision that the Fuel Surcharges had to be passed to the person or company that actually incurred the fuel cost. In those days the surcharge had to be approved by the ICC before it could be charged.
All of that went away under deregulation and now it is strictly market driven. The carrier can charge whatever the shipper is willing to pay and they can choose whatever form of driver compensation will allow them to get the drivers to run the business.
There was an effort to pass legislation to reinstate a federal regulation but is was very controversial and since fuel has come back down it lost momentum to broader issues like health care.
The proposed legislation was too cumbersome to be practical and just added another layer of bureaucracy that really didn't change anything in the bottom line. There are too many ways to structure pricing to shippers and compensation to drivers. You can quote so called "all-in" prices without a fuel surcharge and there is no separate breakdown, or you can quote a base price plus the full cost of fuel or more commonly the base price includes fuel up to a certain "peg" and then a surcharge when it is over that peg.
Likewise some carriers pay their Owner Operators a flat mileage rate or a percentage of the load which is presumed to include all costs including fuel and others pay a mileage rate plus a variable surcharge.
With the current freight recession some shippers and some carriers are taking advantage of the market if they think they can always find another carrier or driver to replace the ones that go under. Others take a longer term view and want loyalty when the market rebounds.
Trucking has always been a highly competitive business and in the free market economy all parties are free to make their own deals. The only rules are the remaining FMCSA safety and registration rules and of course the IRS.
To answer your last question if you think the company you drive for is not giving you a fair deal there are still companies out there that treat their owner operators and company drivers fairly and yes some are even still hiring. You just have to look a little harder and maybe be a bit flexible. There will always be jobs for the safe productive drivers. They can't outsource your job to India. Hang in there and it should get better.
Best of luck.
Jim.
