Fuel Prices and Your Bottom Line
One would have to live in a coma to not feel the impact that the rise in fuel costs is having on the worldwide economy. Let’s delve into how freight rates are calculated and why they are spiraling. v One important fact about freight that needs to be understood is that freight is a commodity. It is supply versus demand, pure and simple. The rates charged to a customer have specific inputs, such as insurance, overhead, equipment (tractor and trailer expenses), maintenance, and fuel. But, by and large, the indicator that determines the final rate charged to the customer is how much that customer will pay to have their freight moved. v Fuel prices – anyone filling up at the pump is keenly aware of the impact that the increase is having. o What is your average fuel economy? Do you get at least 35 mpg, better or worse? Do you understand that semi-tractors get between 5 and 10 mpg, depending on their age, the weight they carry and other fuel efficiency capabilities?