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KLLM, INC. RULES CIRCULAR

Item 550

FUEL SURCHARGE

A fuel surcharge of cents per mile will be assessed on the applicable line haul portion of every freight bill. It will be inclusive of circuitous mileages but will not apply to accessorial items.

The initial base fuel index price will be $1.10 per gallon. At such time when the D.O.E. weekly index reflects a five (5) cent per gallon change from the base fuel index price, there will be a fuel surcharge rounded to the nearest cent. Each subsequent rise of $0.01 shall result in an additional fuel surcharge of $.002 per loaded mile, rounded to the nearest whole cent as outlined below:

Weekly D.O.E. Index

Calculated Rate

Fuel Surcharge

$1.10

BASE

BASE

$1.11

0.002

0

$1.12

0.004

0

$1.13

0.006

0

$1.14

0.008

0

$1.15

$0.010

$0.01

$1.16

$0.012

$0.01

$1.17

$0.014

$0.01

$1.18

$0.016

$0.02

$1.19

$0.018

$0.02

$1.20

$0.020

$0.02

$1.21

$0.022

$0.02

$1.22

$0.024

$0.02

$1.23

$0.026

$0.03

$1.24

$0.028

$0.03

$1.25

$0.030

$0.03

$1.26

$0.032

$0.03

$1.27

$0.034

$0.03

$1.28

$0.036

$0.04

$1.29

$0.038

$0.04

$1.30

$0.040

$0.04

$1.31

$0.042

$0.04

$1.32

$0.044

$0.04

$1.33

$0.046

$0.05

$1.34

$0.048

$0.05

$1.35

$0.050

$0.05

$1.36

$0.052

$0.05

$1.37

$0.054

$0.05

$1.38

$0.056

$0.06

$1.39

$0.058

$0.06

$1.40

$0.060

$0.06

$1.41

$0.062

$0.06

$1.42

$0.064

$0.06

$1.43

$0.066

$0.07

$1.44

$0.068

$0.07

$1.45

$0.070

$0.07

$1.46

$0.072

$0.07

$1.47

$0.074

$0.07

$1.48

$0.076

$0.08

$1.49

$0.078

$0.08

$1.50

$0.080

$0.08

$1.51

$0.082

$0.08

$1.52

$0.084

$0.08

$1.53

$0.086

$0.09

$1.54

$0.088

$0.09

$1.55

$0.090

$0.09

$1.56

$0.092

$0.09

$1.57

$0.094

$0.09

$1.58

$0.096

$0.10

$1.59

$0.098

$0.10

$1.60

$0.100

$0.10

$1.61

$0.102

$0.10

$1.62

$0.104

$0.10

$1.63

$0.106

$0.11

$1.64

$0.108

$0.11

$1.65

$0.110

$0.11

$1.66

$0.112

$0.11

$1.67

$0.114

$0.11

$1.68

$0.116

$0.12

$1.69

$0.118

$0.12

$1.70

$0.120

$0.12

$1.71

$0.122

$0.12

$1.72

$0.124

$0.12

$1.73

$0.126

$0.13

$1.74

$0.128

$0.13

$1.75

$0.130

$0.13

$1.76

$0.132

$0.13

$1.77

$0.134

$0.13

$1.78

$0.136

$0.14

$1.79

$0.138

$0.14

$1.80

$0.140

$0.14

$1.81

$0.142

$0.14

$1.82

$0.144

$0.14

$1.83

$0.146

$0.15

$1.84

$0.148

$0.15

$1.85

$0.150

$0.15

$1.86

$0.152

$0.15

$1.87

$0.154

$0.15

$1.88

$0.156

$0.16

$1.89

$0.158

$0.16

$1.90

$0.160

$0.16

$1.91

$0.162

$0.16

$1.92

$0.164

$0.16

$1.93

$0.166

$0.17

$1.94

$0.168

$0.17

$1.95

$0.170

$0.17

$1.96

$0.172

$0.17

$1.97

$0.174

$0.17

$1.98

$0.176

$0.18

$1.99

$0.178

$0.18

$2.00

$0.180

$0.18

Calculation continues in same increments.

The surcharge will become effective with the January 8, 2001, D.O.E. index price, and each week the D.O.E. index will be used to calculate the new surcharge amount. All amounts for surcharges will appear as a separate line item on your freight invoices.

Item 560

FUEL SURCHARGE - REEFER

A reefer fuel surcharge in dollars per load will be applied to temperature-controlled shipments based on the length of haul.

The initial base fuel index price will be $1.10 per gallon. At such time when the D.O.E. weekly index reflects a ten (10) cent per gallon change from the base fuel index price, a reefer fuel surcharge will be applied as a percentage of linehaul revenue beginning at .5% and increasing in .5% increments for each ten (10 ) cent increase in the weekly D.O.E. National Average.

Weekly

     

Reefer Surcharge

D.O.E

     

as a Percent of

Index

     

Linehaul Revenue

         

1.100 - 1.199

     

0.0%

1.200 - 1.299

     

0.5%

1.300 - 1.399

     

1.0%

1.400 - 1.499

     

1.5%

1.500 - 1.599

     

2.0%

1.600 - 1.699

     

2.5%

1.700 - 1.799

     

3.0%

1.800 - 1.899

     

3.5%

1.900 - 1.999

     

4.0%

2.000 - 2.099

     

4.5%

2.100 - 2.199

     

5.0%

2.200- 2.299

     

5.5%

2.300 - 2.399

     

6.0%

2.400 - 2.499

     

6.5%

2.500 - 2.599

     

7.0%

Calculation continues in same increments.

The surcharge will become effective with the March 17, 2003, D.O.E. index price, and each week the D.O.E. index price will be used to determine the new surcharge amount. All amounts for surcharges will appear as a separate line item on your freight invoices.

Spotted Trailer: Shipper shall be responsible for replenishing reefer fuel consumed while refrigerated trailer is spotted for consignee's and consignor's convenience. Fuel levels shall be measured at time of tender and at time of pickup. Shipper shall be invoiced for any net reduction at the rate of $0.50 per gallon plus the then-current DOE price of fuel times the number of gallons necessary to replace the deficiency.

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