It is no secret that fuel prices are rising at a rapid pace. As fuel rates continue to increase, trucking companies are having to add an invoice line to assist with the additional costs to fill up at the pumps. The additional cost can vary from 10% to 60% depending on the trucking company you use to move your freight. The basis of the surcharge must be what the starting price for fuel was prior to the surcharge being added. The second component to the surcharge is the amount the fuel cost is per running kilometer.
Before the extraordinary price increases at the pumps, fuel was about $0.65 per litre at the beginning of 2004. Since then fuel has more than doubled. When trucking companies realized the price was not coming down, it was determined that adding
a line item for fuel was the best approach instead of re calculating freight rates every time the price went up at the pumps.
At secure store we have decided to use $1.10 per litre of diesel fuel with a 16% fuel surcharge as our new benchmark as it will help to keep the math simple and we do not expect the cost per liter to go below $1.10 per liter anytime soon, if it does we will certainly continue to lower the surcharge. The cost per running kilometer for fuel has been calculated to be 35% of the cost of running down the highway for us. So what does this all mean…
Assuming it costs $1,000.00 to haul your trailer to your site and the cost of fuel is $1.25 per liter the fuel surcharge will be $1.25-$1.10=$0.15x.35% = 5% + 16% = 21% total fuel surcharge. Example: Fuel surcharge is $1,000.00 x 21% = $210.00 dollars. The total cost to transport your trailer is therefore $1,210.00.
We use the Ontario Ministry of Environment as the official site to determine the average fuel cost in Northern Ontario.
The fuel surcharge will be adjusted each Monday morning and applied to the freight trips for the previous week when
we do our invoicing.
As we all have to deal with unprecedented fuel price levels, we appreciate our clients understanding of the necessity
of the fuel surcharge.