Disputes over fuel surcharge revenue were a major point of contention between shippers and carriers of all modes and types last year during the big run up in fuel and oil prices.
In its “State of the Industry” report, released this week, trucking giant Schneider National suggests new thinking about fuel surcharge programs is in order:
“Volatile fuel prices have led both shippers and carriers to develop a more equitable way to calculate fuel surcharge.
“Currently, fuel surcharge programs involve a particular fuel surcharge rate being applied to the miles ran in a given time period (i.e. monthly or weekly). The fuel surcharge rate is based on the national average retail price for diesel as reported by the Energy Information Administration.
“This type of program is effective in a stable fuel market. However, in a market where fuel prices are rapidly increasing, this type of program does not fairly compensate the carrier for the increased cost of fuel. Conversely, in a market where fuel prices are rapidly decreasing, the shipper may incur significantly higher fuel surcharge costs.
“This has led to the development of fuel surcharge programs that fairly provide reimbursement based on the true market cost of fuel per freight movement. Such programs involve proprietary software that can calculate actual fuel costs on a per lane basis, for a given day.
“This type of fuel surcharge program may become the norm if the volatility in fuel costs continues.”
What do you think about rethinking fuel surcharges?