Fuel Surcharge
Definition of fuel surcharge
A fuel surcharge is an extra fee levied by transportation companies to offset the fluctuating costs of fuel. Fuel surcharge makes sure companies can manage the variability in fuel prices without compromising their operations.
Why is a fuel surcharge important?
A fuel surcharge helps transportation companies maintain financial stability amidst fluctuating fuel prices. This charge allows for consistent service quality and helps companies mitigate the impact of sudden fuel cost increases.
How is a fuel surcharge calculated?
The fuel surcharge is typically calculated based on the current fuel price index compared to a baseline price. Companies use formulas that adjust the surcharge as fuel prices rise or fall for fair cost distribution.
When do you pay a fuel surcharge?
You pay a fuel surcharge when you use transportation services that require significant fuel consumption. The surcharge is usually itemised separately on the invoice, reflecting the additional cost due to fuel price changes.
Why is a fuel surcharge outsourced?
Outsourcing the fuel surcharge calculation and implementation allows companies to use specialised expertise to manage these charges accurately. It ensures transparency and fairness, helping maintain customer trust.
The Best Rate For Your Freight
Access real-time quotes from leading freight providers. Choose the best ocean and air shipping option for your business.