Glossary

Fuel Surcharge

Definition

A fuel surcharge is an additional fee applied by transportation providers, such as trucking companies, airlines, and shipping lines, to cover the fluctuating costs of fuel. The surcharge is often based on a percentage or a fixed rate, and it is adjusted periodically according to changes in fuel prices. By implementing a fuel surcharge, transportation providers can maintain stable pricing structures while offsetting the impact of volatile fuel costs on their operations.

— sennder Team

FAQ

Fuel surcharges are typically calculated based on the average fuel price over a specified period, such as a month or a quarter. The surcharge may be expressed as a fixed amount per mile or kilometer, or as a percentage of the total transportation cost. Some providers use a fuel surcharge index, which is tied to a published fuel price index, to determine the surcharge amount.
Not all transportation providers charge a fuel surcharge, but it is a common practice in the industry, especially when fuel prices are high or subject to significant fluctuations. Providers may have different policies and methods for calculating and implementing fuel surcharges.
Fuel surcharges may be negotiable in some cases, depending on the provider's policies and the specific terms of the transportation contract. However, in many cases, fuel surcharges are considered a standard part of transportation pricing, and providers may be unwilling to waive or reduce them.
The frequency of fuel surcharge updates depends on the provider's policies and industry practices. Some providers adjust fuel surcharges monthly, while others may do so on a quarterly or semi-annual basis.
Example or usage in road freight logistics

A trucking company provides transportation services for a manufacturing company, moving goods between warehouses and distribution centers. Due to fluctuations in diesel fuel prices, the trucking company applies a fuel surcharge to its transportation fees. The surcharge is calculated based on the average diesel fuel price over the past month and is added to the company's standard transportation rates. By implementing the fuel surcharge, the trucking company can offset the impact of rising fuel costs on its operations, ensuring that it remains profitable and can continue to provide reliable services to its customers.

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