Fuel Surcharge Optimization

Please click here for a complimentary copy of our Fuel Surcharge report.

Organizations that move freight primarily in the Midwest, Southeast or Gulf Coast should use the fuel advantages of those regions to drive improved rates per mile. Aligning fuel surcharge agreements to the supply chain's footprint and freight suppliers' MPG can result in a savings of 2-5% of the total freight spend. Highlights from the report include: 

• Fuel Surcharge Background - Fuel Surcharges provide a vital role in transportation agreements, protecting carriers and shippers from large swings in diesel prices. However, the importance of the surcharge tables can often be overlooked during negotiations.
• Fuel Surcharge Index - Fuel Surcharge Agreements typically specify if the index is regional or national, with national agreements being common, which may cause buyers in advantaged areas to overpay.
• Regional Variations - Geography determines diesel pricing and should be reflected in regional contracts. Fleets in the Midwest, Gulf Coast, and Southeast are consistently able to buy fuel at significantly less than the national average price.
• Fuel Surcharge Increments - Increments should be based on the fleet's MPG and can have a large impact on cost per mile, especially as diesel prices increase.
• Contract Review - Buying organizations should ensure their surcharges reflect their supply chain's regional footprint and their suppliers' fleets' efficiency.
• Potential Impact - Shippers could achieve up to $0.09 per mile savings with diesel prices at $2.00 per gallon.

Please click here for a complimentary copy of our report.