Fleet Management News & Business Info | Commercial Carrier Journal
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INNOVATORS Low pump prices, low turnover F Berry & Smith Trucking makes fuel costs a nonworry for contractors BY AARON HUFF uel programs are one of many benefits fleets use to recruit and retain owner-operators. Giving them fuel cards and discounts at fuel stops is standard fare. Many fleets also are paying a fuel surcharge on loaded miles. Some even pay a surcharge on deadhead miles. For more than 12 years, a Canadian company has taken a different approach. Berry & Smith Trucking has diverse freight runs, so its fuel reimbursement pro- gram had to be different from the start. When fuel prices spiked in 2000, Berry & Smith started offering drivers a price cap for fuel, a program that remains in effect. Drivers still purchase their fuel us- ing company cards, but instead of paying the price at the pump, their purchases are reconciled monthly from their settlement checks at no more than $0.47 per liter – about $1.78 a gallon. The intent of the program is to make fuel costs affordable and predictable for drivers, says Dorothy Vankoughnett, IT manager and controller at the Penticton, British Columbia-based fleet. The company has maintained its price cap at $0.47 per liter, even with fuel prices today more than double what they were in 2000. Rather than reimbursing drivers for fuel on a cents-per-mile basis, Berry & Smith's price cap gives drivers an easy way to budget and forecast their fuel costs for each load, regardless of the route, weight, miles and pay structure. Drivers know their fuel costs long before they get a monthly settlement. Suppose a driver is trying to choose between two loads that have the same mileage, the same base rate of $750 and the same fuel surcharge of $250. While the total revenue is the same, one load is 10,000 pounds and moves on a flat ter- rain, while the other is 40,000 pounds and travels through the Rockies. Instinctively, the driver knows that the 40,000-pound load will consume more fuel, but he also must consider deadhead mileage. If the 10,000-pound load has more deadhead, which one is the most profitable? With either load, the driver cannot determine quickly if the fuel surcharge is fair compensation. BERRY & SMITH TRUCKING Penticton, British Columbia The problem becomes more com- plex if the driver is paid hourly. With the fuel cap program, drivers have a consistent way to budget their fuel costs for any load, whether they are paid by the hour or the mile. One size fits all Berry & Smith was started in 1954 when Stu Berry and Ted Smith began hauling coal in the winter and fruit in the summer in Penticton. The com- pany added a bus fleet to its trucking operations in 1964 by acquiring the Penticton school bus contract; it later added the city's transit bus contract in 1977. Over the years, the company has ex- panded its menu of services to include dry van, flatbed, intermodal, special- ized and hazmat, with full operating authority to all of the lower 48 states and Canada, though it is primarily a regional carrier with offices in Pentic- ton, Vancouver and Calgary. The company pays drivers – both company and owner-operators – by the mile and the hour depending on the nature of the job. The fleet is comprised of 85 owner-operators and 25 company drivers, a mix designed to ensure customer service; company drivers and trucks give Berry & Smith the flexibility to operate double shifts and do "that extra thing for the cus- tomer," Vankoughnett says. The company offers owner-operators a fuel price cap and incentive to make costs more affordable and predictable. COMMERCIAL CARRIER JOURNAL | SEPTEMBER 2012 61