PPSIMMONS has become aware of massive fraud taking place in the trucking world in recent years. It stems back to the rapid rise in fuel prices which threatened to drive the economy in N. America to a grinding halt due to the inability of truckers to move down the road for the rates in place which failed to compensate for the rising fuel prices.
Eventually shippers and receivers were forced to pay a fuel surcharge; money collected by trucking companies to compensate for fuel costs. The customers began to expect this added cost and currently the fuel surcharge can reach as high as 35 - 40 percent of the line-haul cost. And this is where the fraud becomes evident.
The trucking world is largely driven by small business; owners of one truck who lease on with the larger companies which dispatch the drivers, provide insurance, licence plates, etc. These truck owners are responsible for 100% of the cost of fuel, however, they are not in charge of billing customers for the cost of hauling goods. The trucking companies bill the customers and pay the truck owner a per-mile rate, flat rate, or percentage of the total rate.
The trucking companies also collect the fuel surcharge from the customers as part of the billing for hauling the goods. For a hypothetical example, ABC Trucking has ten owner-operators (in addition to its fleet of company trucks) . ABC agrees to pay its owner-operators (guys who own their own trucks) $1.30 per mile. They also pay a per-mile rate for fuel expense, say, $0.20 per mile for a total of $1.50 per mile. ABC Trucking could be getting as much as $1.00 per mile or more for the fuel surcharge from the customers but is only paying the truck owner a small portion of the money collected in spite of the fact that the money is intended for the one buying the fuel, in this case, the owner/operator.
Companies are profiting from the fuel surcharge; money which is supposed to go to the guys who own the trucks and are buying the fuel. This is theft. The customers are paying a surcharge for fuel expenses. The larger trucking companies are not passing the money on to the people to whom it is intended. They are stealing it.
Mike Shoesmith is intimately aware of this massive fraud going on in the trucking world. He's been an owner/operator for two decades. For the past ten years he's had trucks leased on with Quality Carriers out of Tampa, Fl.
"In the beginning Quality Carriers paid the entire amount they collected from the customers. This was the right thing to do and we always admired their honesty in these matters", Shoesmith said in an interview. "A few years ago we received a notice stating they would be taking the fuel surcharge away and paying us the national average - an amount agreed upon by a conspiratorial organization of trucking companies around N. America."
Mr. Shoesmith went on to explain that his revenue dropped by 30% instantly and has now been driven out of business by reduced rates and theft by the company. "People in management have confided in me that they are aware they are stealing from the owner/operators and rejoice in the knowledge that they are getting away with it."
Thou shalt not steal.
Exodus 20:15
Quality Carriers is not alone. The greater percentage of companies have chosen to enrich themselves using money which doesn't belong to them and which is intended to be paid to these owner-operators. This has far-reaching implications for the public at large. Mr. Shoesmith explains, "when rates fail to compensate for rising costs these drivers are forced to cut corners when it comes to maintenance, repairs, etc. So at the end of the day the public becomes at greater risk because trucks are going down the road in an unsafe manner. Trucking companies are stealing money from them so they can no longer afford to have basic maintenance performed" he explained. "This problem will become worse as long as the trucking companies continue stealing from small-business truckers."
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