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Yellow | How much $$$ is YRC losing to the Fuel Surcharge, since the price of fuel is so low?

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crusher

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Maybe this will finally put YRC where it belongs. Out of business. The 10 million a year crook will have to find another company to steal from. I think CF is looking for a new leader.
 
Carriers make significnant profit on Fuel Surcharge. Most customers are on different Fuel Surcharge application (depends on their pricing agreement), but as a general rule the roll up of all the combined Fuel Surcharges have a huge impact on the bottom line for the carriers. I don't think this has enough impact to put YRC out of business.

Hope this clears up the confusion.
 
havinsomefun said:
Carriers make significnant profit on Fuel Surcharge. Most customers are on different Fuel Surcharge application (depends on their pricing agreement), but as a general rule the roll up of all the combined Fuel Surcharges have a huge impact on the bottom line for the carriers. I don't think this has enough impact to put YRC out of business.
Hope this clears up the confusion.
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Some can figure it out, others can't. I believe that the fuel surcharge is a percentage and is fixed by the department of energy (DOE) adjusted at regular intervals. The fuel surcharge seems to be based on the discounted rate and to that extent it varies from customer to customer. I do not think that different customers get different surcharge rates otherwise.
 
ABFer said:
Some can figure it out, others can't. I believe that the fuel surcharge is a percentage and is fixed by the department of energy (DOE) adjusted at regular intervals. The fuel surcharge seems to be based on the discounted rate and to that extent it varies from customer to customer. I do not think that different customers get different surcharge rates otherwise.
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Wrong. DOE and/or government does not set, control, or regulate fuel surcharges. Transportation companies use various government statistics on fuel prices to calculate their own fuel surcharges and allocate them as they wish to their customers.

"A fuel surcharge is an extra fee charged by trucking companies (or third parties) to cover the fluctuating cost of fuel. It is calculated as a percentage of base rate and is usually added to a shipper’s freight bill to cover the cost of operations. Fuel surcharge is dependent on the average fuel price that is reported by the government and can be different for each shipper or industry, based on fuel cost to revenue ratio. It is used to cover additional fuel costs and keeps carriers profitable, even when cost of fuel rises.

There is no uniform way of calculating fuel surcharges; companies use their own formula. Most carriers have information on how they determine the fuel surcharge on their website. For example, UPS uses an index-based surcharge that is adjusted monthly and is based on the National U.S. Average on Highway Diesel Fuel Price as reported by the U.S. Energy Information Administration (EIA). Currently, the UPS surcharge is 4.50 percent on ground packages with fuel diesel price of $2.61 per gallon."

http://info.plslogistics.com/blog/what-are-fuel-surcharges-costing-you


"There are no rules covering fuel surcharges. As with freight rates, anything goes.

The systems of calculating and implementing fuel surcharges are worked out between any two parties – a shipper and a carrier, a shipper and a broker, or a carrier and an owner-operator. Standard practices for surcharges do exist, however."

http://www.overdriveonline.com/dollars-and-sense-29/
 
Third Quarter 2015 Operational Highlights (year-over-year comparison)

  • Continued strategy of placing freight mix, yield improvements and profitability over market share and tonnage growth.
  • Tonnage per day decreased 6.2% at YRC Freight and decreased 3.5% for the Regional segment.
  • Excluding fuel surcharge, revenue per shipment increased 7.0% at YRC Freight and revenue per hundredweight increased by 5.8%. Including fuel surcharge, revenue per shipment increased 0.7% and revenue per hundredweight decreased by 0.4%.
  • At the Regionals, excluding fuel surcharge, revenue per shipment increased 5.0% and revenue per hundredweight increased by 4.1%. Including fuel surcharge, revenue per shipment decreased 0.7% and revenue per hundredweight decreased by 1.5%.
 
Carriers make HUGE profit on Fuel Surcharge and would much rather have diesel in the $3.50/gal range. Diesel at $2.00/gal means less profit. The threat to bottom line profits for all carriers in 2016 is accelerated discounting; which would mean less revenue AND less fuel surcharge. Carriers have run the discounts to the low 90% range and have relied on a large portion of profit to come from fuel surcharge.
 
jenny807 said:
Whatever they made off fuel surcharges, is NOWHERE NEAR THE AMOUNT OF MONEY THEY ARE SAVING ON FUEL COSTS, RIGHT NOW!!!
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Carriers pay for fuel at a contracted rate. So when fuel prices drop they end up actually paying more for fuel than you and I. When fuel prices rise, carriers are paying the lower pre-negotiated rate. So no, they ARENT saving right now.
 
yrc-atm said:
Carriers pay for fuel at a contracted rate. So when fuel prices drop they end up actually paying more for fuel than you and I. When fuel prices rise, carriers are paying the lower pre-negotiated rate. So no, they ARENT saving right now.
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Some here are UNFAMILIAR with what a "futures contract" is! Very succinct explanation, and correct assumption. :1036316054:
 
Fuel has been dropping for over 1 1/2 year, now, and YRC's numbers have been getting better every quarter in that same period. They are making more per-shipment every quarter over the last 6 quarters. They have to continue to raise rates; with fuel prices low it will happen. If the fuel surcharge is so big for them; then why are their numbers continuing to get better?

this is straight from the 3rd quarter conference call.....

The improvement in profitability is primarily due to the continued disciplined pricing strategy, offset by tonnage and fuel surcharge decreases and increased vehicle leasing as we continue to refresh the fleet.
the LTL pricing environment remains steady throughout the third quarter and that trend has continued in October, and we will implement a 4.9% GRI effective November 2nd.
 
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yrc-atm said:
Carriers pay for fuel at a contracted rate. So when fuel prices drop they end up actually paying more for fuel than you and I. When fuel prices rise, carriers are paying the lower pre-negotiated rate. So no, they ARENT saving right now.
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I always wondered how those contracts work and I would love to get a look at one. I wouldn't be surprised if there were caps of some sort on both ends to protect each entity from taking too bad of a beating. I pity all homeowners who prepaid their heating oil this year. I'm sure there are a lot of them out there with heartburn right about now and they don't have safety nets to protect either entity.
 
jenny807 said:
Fuel has been dropping for over 1 1/2 year, now, and YRC's numbers have been getting better every quarter in that same period. They are making more per-shipment every quarter over the last 6 quarters. They have to continue to raise rates; with fuel prices low it will happen. If the fuel surcharge is so big for them; then why are their numbers continuing to get better?
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revenue per shipment, excluding fuel surcharges, has increased 7.0%, 9.8%, 8.2% and 7.3% for the last 4 reported quarters, respectively. That's where the increased earnings have come from, would be even better if the fuel surcharge revenue was higher. See KK's post above, it highlights the 3rd quarter of 2015.
 
A carrier publishes tariffs or a rate structure. Then they will negotiate discounts on those published tarriffs. Charges are also published regarding inside delivery, liftgate,sort & seg and fuel surcharges. You can find that under Tarriff 100 on yrc.com.
http a://my.yrc.com/dynamic/national/servlet?CONTROLLER=com.rdwy.ec.rexcommon.proxy.http.controller.PublicProxyController&redir=/TFD616
 
jenny807 said:
Fuel has been dropping for over 1 1/2 year, now, and YRC's numbers have been getting better every quarter in that same period. They are making more per-shipment every quarter over the last 6 quarters. They have to continue to raise rates; with fuel prices low it will happen. If the fuel surcharge is so big for them; then why are their numbers continuing to get better?

this is straight from the 3rd quarter conference call.....

The improvement in profitability is primarily due to the continued disciplined pricing strategy, offset by tonnage and fuel surcharge decreases and increased vehicle leasing as we continue to refresh the fleet.
the LTL pricing environment remains steady throughout the third quarter and that trend has continued in October, and we will implement a 4.9% GRI effective November 2nd.
Click to expand...

Blah blah blah, it's of no concern if they saved any money they are not going to share it with you anyway.
 
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