Owner Operators - The Dock: Tips for the Owner Operator
Getting Your Fuel Surcharge
Being an owner operator is a tough but rewarding job! You're the General Manager, Office manager, president, CEO, and CFO. Knowing your operating cost and cost per mile is vital to your success!
The single largest monthly business expense is your fuel cost. As fuel prices continue to climb, it's imperative that you get a fuel surcharge on every load! A fuel surcharge is a fee that can be added to the freight charges.
If you are leased to a company, chances are that they pay a fuel surcharge on each dispatch. The amount of the surcharge will depend on the weekly Energy Information Administration‘s (EIA) report which can vary from week to week. Be sure that the company you're leased to is passing the surcharge on to you.
If you are brokering your own freight, you're losing money if you are not assessing a fuel surcharge. Be assured that everyone else is assessing a fuel surcharge from that same customer!
If you are using a broker, don't be afraid to ask them if they are assessing a fuel surcharge on the loads you're hauling for them. Nine times out of ten, the broker is getting a fuel surcharge from the customer! If you're not asking for a fuel surcharge, you need to start right now.
To get started, notify your broker and let him know that you expect a fuel surcharge for hauling his freight. If he makes excuses, you need to find another broker! If you are brokering your own loads, then notify your customers that you will need to start assessing a surcharge.
Now that you're getting a fuel surcharge on your loads, what do you do with the extra money? Well, there are many things that you can do with the surcharge, but the best thing you can do is put it into a business savings account and earn interest on it. You will be surprised at how quickly that money will multiply. It will take a lot of discipline to do this but the benefits are worth it!
While it may be tempting to pay bills with your collected fuel surcharge, especially in this tough economy, many owner operators go wrong by doing so. Instead, put the money into savings where it will quickly accumulate into an amount that can pay for an entire trip's worth of fuel.
For the past few weeks, we have continued to see a cent-per-gallon increase in the national average, so there's nothing wrong with getting what's rightfully yours to help you run your business more profitably.