Follow us on Twitter!
Blog Header Logo
DG&A's Transportation Consulting Blog
Subscribe to this list via RSS Blog posts tagged in FCA


There are a host of economic indicators that provide economists, academics and transportation professionals with insights into how the general economy is performing. Data on gross domestic product, imports, exports, housing starts, stock market trends, consumer confidence and unemployment levels are barometers of the level of economic activity in a particular country. These indicators, while somewhat indirect, highlight trends in the economy. Declines in unemployment levels indicate more people are working and as result buying more goods and services. Increases in housing starts suggest that a growing number or people are buying homes, furniture, appliances and carpets. These indices correlate somewhat with freight transportation activity levels. The same applies to other measurements of economic activity.

However, these types of general economic indicators, while helpful, don’t necessarily provide direction as to the specific segments of the economy experiencing the strongest or weakest growth. They don’t shed light on whether there are higher levels of growth in dry van, refrigerated or flat bed traffic.

As a result, transportation professionals need to turn to other indices to understand where the freight industry is going. Some of these measurements are outlined below.

1. ISM Managers’ Index ( )

Hits: 1325
Continue reading 0 Comments

In the most recent Transportation Buying Trends Survey undertaken by Canadian Transportation & Logistics magazine, there is an interesting set of questions that pertain to fuel surcharges. Over 68% of shippers support the view that “fuel surcharges are necessary as long as fuel costs continue to be highly volatile.”  Slightly less than half of the survey respondents believe “carriers apply fuel surcharges correctly.”  Over 61% agreed with the statement that “fuel surcharges are a way for carriers to squeeze additional revenues from their customers to improve their profits.”  Over 55% of shippers support the view that “carriers should adjust their freight charges to market rates that include fuel surcharges and as a result simplify their billings.”

Perhaps the most interesting finding is that 25.8% of shippers have created their own fuel surcharge index.  Since I interact with both shippers and carriers in my daily work, I would like to weigh in on this topic.  This set of responses begs a few questions.  Should shippers be taking their precious time to create fuel surcharge indices and formulas?  How should shippers approach the topic of fuel surcharges?  What should shippers do to optimize their freight costs?  Here are my thoughts.

For shippers that use both private fleet and for-hire carriers, it is essential to be fully informed on all aspects of fuel costs and fuel surcharges.  Even for carriers that use exclusively third party carriers, there is a requirement to have some familiarity with the leading indices and the current surcharges being applied.  For Canadian and cross-border shippers, a subscription to the Freight Carriers Association of Canada’s weekly fuel calculation bulletin will provide you with one of the industry standards for LTL and truckload shipments.  For shippers that use intermodal service or are considering it in their freight programs, they should obtain a copy of the railway/IMC fuel surcharge formulas.  These differ (e.g. are lower) from the over the road surcharge numbers.

The next thing a shipper should do is to gain an understanding of the components of a freight rate.  One needs to understand that a carrier’s freight rate or tariff is based on several components.  There is the cost of pick-up and delivery, the line haul component, the cost for any special handling (e.g. residence, construction site deliveries, etc.) and of course, the fuel component.  For LTL and small parcel shipments, there are a number of other variables that come into play such as shipment weight, density, cube, packaging etc. 

Shippers need to understand that each carrier has its own mix of freight, its own fleet size and specifications (e.g. straight trucks, tandems, tridems etc.), its own head haul and back haul requirements in terms of both yield and volume and its own primary and secondary markets.  In other words, fuel costs and surcharges are a large piece of the puzzle but they represent one element of a carrier’s total cost structure.  At the end of the day, the carrier looks at each shipper’s freight and relates it to their costing model, business requirements, profit objectives and of course, market rates to determine their rate structure.

Hits: 27617
Continue reading 1 Comment

Most Recent Posts


Tag Cloud

Freight contracts Canadian economy Transplace broker bonds freight payment Distribution Blogging Map-21 Sales Training David Tuttle KCS Business Strategy Education BlueGrace Logistics Bobby Harris FMS $75000 bond Microsoft Truckload freight transportation in 2011 freight payment freight audit dynamic pricing shipper-carrier roundtable Crisis management transportation audit Load broker President Obama Freight Carriers Association of Canada automation CRM Transportation Buying Trends Survey trucking company acquisitions Spanx ProMiles Rotman School of Business Railway Association of Canada Cleveland Cavaliers TMS freight transportation FMCSA Derek Singleton US Auto Sales NAFTA US Manufacturing Tracy Matura Loblaw JB Hunt Social Media in Transportation intermodal LTL Doug Davis Software Advice Freight Shuttle System Business Transformation Strategy Trump Conway IANA Werner Driver Shortage Wal-Mart Retail Failure Entrepreneur NCC broker security Fire Phone EBOR Canadian freight market Dan Goodwill cheap oil CSA rail safety freight bid Keystone Pipeline Masters in Logistics professional drivers Sales Management CN freight transportation conference selling trucking companies coaching US Economy 2014 economic forecast Carriers drones USA Truck freight broker Otto mentoring Canada-U.S. trade agreement YRC MBA Transport Capital Partners (TCP) truck driver Training Muhammad Ali Canada U.S. trade US Housing Market US Election NMFC Broker 360ideaspace Finance and Transportation buying trucking companies University of Tennessee Canada tanker cars carrier conference the future of transportation Associates Freight Rates Ferromex Infrastructure CSX 2012 Transportation Business Strategies. Jugaad LinkedIn Surety bond Politics Swift Driving for Profit marketing Rate per Mile 3PL Horizontal Supply Chain Collaboration Twitter Freight Capacity TransForce home delibery economy CSA scores Career Advice shipper-carrier collaboration Canadian Transportation & Logistics 2013 Economic Forecast Consulting freight rate increases Climate Change Social Media shipper-carrier contracts Transportation Facebook robotics freight agreements fuel surcharge Rail solutions provider pipelines Warehousing network optimization Comey Freight economic forecasts for 2012 Reshoring dimensional pricing Packaging shipping wine Stephen Harper Trade Vision Freight Management Hudsons Bay Company Trucking Amazon 2014 freight forecast TMP Worldwide Scott Monty Global Transportation Hub transportation newspaper Dedicated Contract Carriage Crude Oil by Rail Donald Trump financial management employee termination driver shortages Omni Channel capacity shortage business start-up transportation news Training New Hires Transcom Fleet Leasing driver Canada's global strategy small business FCA Transloading MPG freight forwarders Global experience Success failure entrepreneur truck drivers routing guide capacity shortages Success Accessorial Charges freight cost savings FuelQuest BNSF Yield Improvement freight RFP Colilers International autonomous vehicles Retail transportation Right Shoring energy efficiency Regina 3PLTL UP Adrian Gonzalez Transportation service Emergent Strategy future of freight industry LCV's New York Times 2015 Economic Forecast Canadian truckers ShipMax freight costs Life Lessons Inbound Transportation 2014 freight volumes Celadon peak season NS hiring process Toronto driverless Harper Davos speech Deferred Packaging Business skills consumer centric CN Rail Doug Nix Leadership e-commerce Search engine optimization derailments Management CP Rail APL customer engagement Dedicated Trucking bulk shipping FCPC shipping freight audit Job satisfaction RFP Freight Recession Schneider Logistics CITA Shipper Pulse Survey Shipper

Blog Archives