Fuel surcharges

[Trent]

How do you go about coming up with a dollar figure or a percentage for a fuel surcharge. In the past we have raised the rates due to increases in fuel costs, but in our current economy I feel presenting it as a fuel surcharge might be more understandable for the customer. By the way diesel in Oregon was $3.82 yesterday.

[Tomm T]

Trent,

A standard formula for fuel surcharge calculation is to charge 0.5% surcharge for each $0.05 fuel climbs above you base rate. To determine your base fuel rate check the Energy Information Administration website which is part of the US Department of Energy. This has regional fuel costs data and history which will tell you what your fuel price was at the time you set your current service prices. Take the current fuel price and subtract your base rate from it. Divide the difference by $0.05 and mutiply that amount by 0.005. This will be the percentage to multiply you service rate by in order to determine a fuel surcharge. Several LTL companies use this formula nationwide.

[Trent]

Thank you Tomm!

[COLE_Jeff]

That is fantastic information. I never knew there was a standard or base formula for determining a fuel surcharge. Thanks for passing this information along.