Energy and Regulatory Compliance/Inflation Fee (ERCF)

DEFINITION

Russell Reid applies an Energy and Regulatory Compliance/Inflation Fee (ERCF) to customer invoices to offset the volatility in transportation fuel for our truck fleet and for the increased costs associated with the state, local and federal regulatory compliance. The fee is comprised of two parts – a variable portion linked to East Coast U.S. On-Highway Diesel Fuel price (https://www.eia.gov/dnav/pet/pet_pri_gnd_dcus_r10_w.htm) ; and a fixed 12% cost recovery fee for regulatory compliance/inflation. The combination of both fees are calculated as percentage of the total customer invoice.

The energy component is tied directly to the east coast average price of diesel fuel which is reported by the Energy Information Administration of the U.S. Department of Energy.  This federally published index is objective, publically available and widely recognized in the trucking and transportation industries.  The energy component calculation is variable and increases and decreases with the cost of diesel fuel.  Learn more at http://www.eia.gov/petroleum/gasdiesel.

The regulatory compliance/inflation component recovers costs associated with state, local, and federal rules.  Regulations that govern the collection, transfer, processing, and disposal of waste generates additional operating costs which may include surcharges, permit fees, manifests fees, application fees, special assessments, registrations, quality assurance, quality control, etc.  These fees are passed on to the end user or customer as a fixed 12% of the invoice total.

The Energy and Regulatory Compliance/Inflation Fee (ERCF) is not a tax, surcharge or fee imposed or mandated by any governmental or regulatory agency. It is a fee charged by Russell Reid and may be changed at the discretion of Russell Reid. To the extent required by the terms of your service agreement, your consent to the application of the Energy and Regulatory Compliance/Inflation Fee (ERCF) and any changes thereto is effective upon completion of your service.


QUESTIONS AND ANSWERS

Operating costs associated with this fee are based on commodity and industry changes that cannot be directly controlled through internal efforts.  Additionally, the pace at which these costs increase adds an element of volatility that cannot be incorporated into our normal cost structure.  Recovery of these costs is necessary to continue providing the superior level of service our customers deserve and expect from Russell Reid.

The constant fluctuation in the cost of diesel fuel makes it difficult to recover fuel expense in our standard operating margins. While we seek to run the most efficient vehicles in the industry, a fleet average of just 8 miles per gallon represents a significant portion of our operating expenses.

 

Since this portion of the fee is tied to the East Coast Average diesel price which is published monthly,  it will adjust up and down accordingly.  See fuel component calculations below.

The regulatory compliance/inflation component recovers costs associated with state, local, and federal rules.  Regulations that govern the collection, transfer, processing, and disposal of waste generates additional operating costs which may include surcharges, permit fees, manifests fees, application fees, special assessments, registrations, quality assurance, quality control, etc.  These fees are passed on to the end user or customer as a fixed 12% of the invoice total.

The regulatory compliance/inflation component is fixed at 12% of the invoice total excluding any applicable taxes.

 


ENERGY COMPONENT CONSUMITIONS
East Coast Diesel AverageEnergy“Compliance/InflationTotal
FromToFeeFeeERCF
$1.50$1.993.00%12.00%15.00%
$2.00$2.494.00%12.00%16.00%
$2.50$2.995.00%12.00%17.00%
$3.00$3.496.00%12.00%18.00%
$3.50$3.997.00%12.00%19.00%
$4.00$4.498.00%12.00%20.00%
$4.50$4.999.00%12.00%21.00%
$5.00$5.4910.00%12.00%22.00%
$5.50$5.9911.00%12.00%23.00%
$6.00$6.4912.00%12.00%24.00%
$6.50$6.9913.00%12.00%25.00%
$7.00$7.4914.00%12.00%26.00%
$7.50$7.9915.00%12.00%27.00%
$8.00$8.4916.00%12.00%28.00%
$8.50Greater17.00%12.00%29.00%