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Should Fuel Surcharges Cost Me This Much?

Should FUEL SURCHARGES Cost Me This Much? What is a Fuel Surcharge? The fuel surcharge amount depends on 3 FACTORS: Threshold Mileage Fluctuation THRESHOLD FUEL PRICE: If fuel costs more than the base price, the surcharge will be applied. BASE FUEL MILEAGE: Usually 5-7 miles per gallon. The average 18-wheeler gets about 6.00 mpg. FUEL PRICE FLUCTUATION: The U.S. Department of Energy publishes weekly reports on the fluctuating national and regional costs of fuel. THE MOST COMMON FORUMULA Fuel surcharges are added to the total freight bill on a per-mile or percentage basis. (Current fuel price-threshold price)/ mpg = fuel surcharge rate Fuel surcharge = fuel rate*number of miles Why is there a FUEL SURCHARGE? FUEL IS THE MOST EXPENSIVE part of long-distance freight transportation. Trucking companies CHARGE AN EXTRA FEE to cover the fluctuating cost of diesel. This extra fee is the fuel surcharge. Whether the price of diesel is high or low, fuel surcharges help eliminate some of the FINANCIAL BURDEN PLACED ON CARRIERS. 5 YEAR DIESEL PRICES $5000 Average $4000 Low High $3000 $2000 $1000 2010 2011 2012 2013 2014 commercial truck Fuel costs account can consume more than $70,000 OF DIESEL for 39% OF TOTAL OPERATING COSTS FUEL PER YEAR A commercial truck uses more than 20,500 GALLONS OF FUEL IN ONE YEAR How Can a 3PL LOWER FUEL SURCHARGES? 3PLS HAVE MUCH BETTER RELATIONSHIPS WITH CARRIERS than most shippers. When a 3PL brokers a deal, especially a long-term deal, a carrier will often lower the fuel surcharge or even forego it all together in > pments to haua Diesel prices are decreasing, fuel surcharges are not. This is because carriers need extra capital to invest in their business. CARRIERS ARE %24 MUCH MORE LIKELY TO LOWER FUEL SURCHARGES FOR A 3PL who has a good working relationship with them than a shipper who is just looking for cheap transportation. With the help of an advanced TMS, 3PLS can optimize routing to SAVE ON FUEL COSTS. For example, switching a shipment from over the road to a much more efficient mode like rail or barge. 3PLS typically have THOUSANDS OF CARRIERS in their network. This gives them the buying power to leverage lower fuel surcharge costs and lower shipping prices in general. 00 00 If you want to get expert PLS assistance in dealing with fuel surcharge rates, contact LOGISTICS SERVICES PLS LOGISTICS SERVICES. SOURCES: eia.gov, thetruckersreport.com SSS

Should Fuel Surcharges Cost Me This Much?

shared by PLS-Logistics on Sep 08
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Fuel surcharges are unavoidable, but they don't have to drive up shipping costs. Learn how to mitigate the cost of fuel surcharges.

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PLS Logistics

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shipping

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Transportation
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