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Low oil brings truckers falling revenues as fuel surcharges fade away

TRUCKERS' income from fuel surcharges has evaporated with falling oil prices, which have dropped about one cent per mile across the board at the end of August, according to DAT Solutions.

While the price drop has generated savings, the loss of surcharges has squeezed some trucking companies to the point where several truckload carriers reported a year-on-year drop in revenue.

The 21 publicly owned motor carriers tracked by JOC barely increased their combined second-quarter revenue, raising it 0.6 per cent from a year ago to $10.7 billion.

The national average dry van spot rate dropped to $1.75 per mile, while the flatbed and refrigerated rates fell to $2.06 and $2.03 per mile, respectively, reports Newark's Journal of Commerce.

The load-board operator attributed the drop solely to lower fuel surcharges, noting the line-haul rates for dry van, refrigerated and flatbed tractor-trailers were unchanged from week to week.

At $2.514 per gallon, the average US retail diesel price hit a low August 31, the lowest since July 2009, when the economy was emerging from recession. The US Energy Information Administration average was down $1.30 or 34 per cent year on year.

At Swift Transportation, the largest US truckload carrier, fuel surcharge revenue dropped 38 per cent year on year in the second quarter. At Werner Enterprises, surcharge revenue fell 34 per cent, and at Knight Transportation, surcharges were down 27 per cent.

Spot market truckload fuel surcharges also are down by double digits, DAT Solutions Industry Pricing Analyst Mark Montague told JOC.com in a recent interview. Through late July, spot fuel surcharges had dropped by about 20 cents per mile, he said, nearly a 40 per cent drop.