Your New Tote
for AS/RS
akro-mils.com 800.253.2467 © 2 0 1 6
Ak
ro
-Mils
/Mye
r
sInd
us
tr
ies
Inc.A
KM5
8
2
Visit us at
Booth #2346
Akro-Mils’ Multi-Load Tote is perfect for
general storage and logistics applications
and ideal for maximizing space in Mini-Load
Automated Storage and Retrieval Systems.
Totes feature a reinforced bottom, ribbed
sidewalls, and a reinforced rim for strength
and stability. Its unique sidewall clip design
allows you to customize the tote interior with
optional cups and dividers.
To find out more, call 800.253.2467 or visit
us online at akro-mils.com!
MULTI-LOAD TOTE
ated based in part on fuel price forecasts,
which may or may not be accurate, but
also on whether a shipper, not wanting
to be bothered with fuel price volatility,
would rather live with a high peg, pay virtually no fuel surcharges, and work toward
negotiating a more favorable line-haul
rate. Chris Lee, vice president of Bridge
City, Texas-based ProMiles Software, a
firm that provides real-time fuel price
tracking for carriers, said shippers in that
scenario get a level of fuel price predictability that wouldn’t be available with a
lower peg and might be willing to absorb
higher line-haul rates as a trade-off.
Lee said he knows of a large shipper,
which he did not identify, that negotiated
a contract for 2016 with a peg price of
$2.50 a gallon. With the carrier getting 6
miles to the gallon, it embeds 41. 6 cents
a mile into the line-haul rate to cover its
imputed fuel cost. However, with fuel
prices on its lanes running around $2 a
gallon, the carrier’s actual fill-up cost is
33. 3 cents per mile, Lee estimates. That
8.3-cent-a-mile difference—multiplied
by thousands of miles driven—comes out
of the shipper’s pocket and goes straight
to the carrier’s bottom line, he said.
The dilemma for shippers is compounded by the variance in prices from,
say, the Midwest and Gulf Coast, where
diesel is cheaper, to the Northeast, where
costs are higher. Fuel for a Dallas-to-Chicago run costs $1.92 a gallon, while a
Boston-to-Chicago trip clocks in at $2.21,
according to ProMiles’ current estimates.
Yet only 10 miles separate the respective
distances, Lee said. If the pegs on each
run were the same, the difference in prices
could be easily compared, Lee said. Not
so, however, if the peg on one lane was
set at $1.50 a gallon, and the other at $2 a
gallon, he added.
ZERO TOLERANCE
Much of the head-spinning would dis-
appear if the industry eliminated the
peg altogether, let surcharges effective-
ly cover all of the fuel cost, and let the
chips fall where they may in line-haul
rate negotiations, according to several
experts. A zero peg eliminates pricing
variability and gives carriers an incentive
to invest in more fuel-efficient equipment
and run their networks more effi-
ciently to reduce wasteful fuel burn,
they contend.
“Everything other than a zero
base is artificial and manipulated,”
said Craig Dickman, founder of
Breakthrough Fuel LLC, a Green Bay,
Wis.-based consultancy that pro-
vides shippers with daily fuel pricing
across all requested lanes, among
other services. Chris Caplice, exec-
utive director of the Massachusetts
Institute of Technology’s Center for
Transportation & Logistics, said a
zero peg is easy to administer and
understand, and imposes needed
