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The Elite Way Express is dedicated to treating both our customers and our drivers as fair as possible. Because of this dedication, we have adopted a fuel surcharge calculation method that is widely accepted and fair to both our drivers and our customers.
Our equation is mileage-based and very closely follows that as proposed by the Motor Carrier Fuel Cost Equity Act of 2000 - 2002 and the Highway Reauthorization Bill before Congress in 2005, both of which were supported by the Owner-Operator Independent Drivers Association (OOIDA) and the Truckload Carriers Association (TCA). These bills attempted to make fuel surcharges and their calculation method mandatory. The bills also outlined requirements that all of the mandatory fuel surcharge be passed through to the person responsible for paying for the fuel - something that the Elite Way Express has always done.
This method provides unparalleled accuracy to determine how much increased cost of fuel is being incurred and therefore how much we must charge our customers for reimbursement. The reason this method works so well for our business is because we haul each shipment alone. We do not have to try to divide a fuel surcharge among several different shipments or charge a percentage. We also do not use "trigger point" methods because of their lack of accuracy. Our fuel surcharge is completely independent of our other rates, using the loaded miles and the current national average fuel prices updated daily. This method more closely links the fuel surcharge to prevailing market prices for fuel, and helps us respond more quickly to changes in fuel prices in the marketplace.
The Elite Way Express always passes the entire amount we charge for fuel surcharge on to the person responsible for paying for the fuel. We refuse to profit by overcharging for a fuel surcharge or by keeping part of it. We do not make any money off of fuel surcharges and feel that it would be wrong if we did.
Here is an example of how the fuel surcharge is calculated:
Suppose the current national average price per gallon of fuel is $3.241 for gas and $3.483 for diesel and we have a load that must go 362.1 miles for one of our gas-powered cargo vans.
First we take the current national average price per gallon of fuel and subtract the benchmark price of $1.10 to give us the increased cost per gallon of fuel.
[Current national average price per gallon of fuel] - [Benchmark price of $1.10] = [Increased cost per gallon of fuel]
In this case, the formula would give us:
$3.241 - $1.10 = $2.141
Now we must determine how much fuel will be used to do the load.
If the load is 362.1 miles, we divide the distance by the vehicle's average miles per gallon, which we use 13 MPG for our gas cargo vans, 8 MPG for our diesel straight trucks, and 5 MPG for our diesel tractor trailers.
[Miles of load] / [Average miles per gallon] = [Gallons of fuel used for load]
This load would use 362.1 / 13 = 27.85 gallons of gas.
The total fuel surcharge would be the increased cost per gallon of fuel multiplied by the number of gallons of fuel used for the load.
[Increased cost per gallon of fuel] * [Gallons of fuel used for load] = [Total fuel surcharge]
In this example, the total fuel surcharge would be: $2.141 * 27.85 = $59.64
Copyright © 2009 The Elite Way Express, Inc. & Dave White. All rights reserved.