The rising cost of fuel is getting us all, but to put things in perspective, think of it this way and don't panic. with an average of 10 mpg (just for conversations sake) you can get 370 miles per tank of fuel. at 1.25 per mile that is 468.75 in generated revenue. If fuel were to go up .10 CPG, it only cost you .01 cents more per mile. if it goes up 1.00 per gallon, you only have to increase the per mile rate by .10. There are alot of guys talking about sur charges and etc... but if you just quote your per mile rate based on the cost of fuel, and explain it to your customer, you will find that they are usually pretty understanding. The rising cost of fuel since it has began climbing 5 years ago is on forced me to raise my prices marginally. and the truth is I get much better than 10 mpg.
Don't undercut yourself, push for those surecharges as best as you can. We don't need any undercutting in this business. We figured it out last night we need to be charging a dollar a mile, just for fuel. But, thats in a 80K rig at 5mpg. When fuel jumps like this, it makes a huge impact on overall cost, and we see many people still only "slightly" adjusting their rates, when they get their CFN bills and relize they are now out of business, they'll relize they screwed themselves on their rates...
well i had to get out cause the customers we have do not want pay more and the company i was leased on to was dropping the rates to keep the customers happy.....so yes it was affecting my pay BIG TIME!!! better off just working for someone else with a garantee....
That is why it's so important for everyone to hold their rates, so those of us that can add, can afford to STAY in business. The next 60 days will tell a lot, if the price of fuel continues to go up. The people that are trying to hold their rates or think "it's not costing all that much extra for fuel" will soon find themselves out of business, because they couldn't add.... Another thing some people forget to add in, is now what it costs OUTSIDE of the routes. Now, it is costing more to go to the tire shop, mechanic shop, go get fuel, go preload, guy gets lost and drives 10 miles out of his way, trying to get to that tire shop..... You have to calculate ALL that stuff into your rates, because if you don't, you'll burn up your marginal profit trying to do a lower rate on a load.... Granted, I'm basing my words apon class 8 trucks where fuel prices have a higher impact on overall cost, but it still is important in smaller rigs too.
I have continued to rasie my rates over the past few years, and we have a formula that even calclates truck washes and Electronics into our quotes. our fuel cost is only 33.8 cpm and our insurance is the same as the big trucks. I was able to increase business 532% last year and expect to see a 80-120% increase this year. For give the mispelled words, I am driving.
