If you work in the shipping and distribution industry, the fuel surcharge cost is one of the most important figures you’ll see through the average working day. Due to the daily changing price of crude oil and gas, an additional fuel surcharge cost is a necessary calculation for the shipping industry. According to statistics, the United States fuel price has risen to $4.87 per gallon as of June 2022. With continuously fluctuating fuel prices, the shipping and carrier industries take the risk of getting the worst end of fuel increases. Standard fuel surcharges, calculated from carrier to distribution, negate some of the impacts that the rise-and-fall of gas prices might have on the industry.
Everything to Know About Fuel Surcharges
Here’s everything to know about fuel surcharges, and how they impact the shipping and distribution industries in 2022.
Why the Fuel Price Fluctuates
As we all know, gas prices aren’t set in stone. Instead, fuel prices will rise (and fall) over time. Transport, including shipping and logistics, are two of the main industries that will feel the impact of rising-and-falling fuel prices far before consumers do. What causes fuel prices to fluctuate so much? It’s not just about the general economy or exchange rate, but the fuel price can also be impacted by crude oil prices, distributor costs and even an unstable economic climate. Shortages of essential products (or uncertainty in any part of the worldwide financial climate) can affect a volatile fuel price. There are – in truth – hundreds of different factors that will impact the final fuel price. For the protection of the transport, shipping, and logistics industries during fuel fluctuations, a fuel surcharge cost is included.
Explaining the Fuel Surcharge
The term surcharge originates from the French word “surcharger”, which means an extra or added cost on something. The simple definition of a fuel surcharge is an added levied cost (usually from one company to another) that compensates for any differences in the fuel cost that could negatively impact either business. In order to make sure the rising (or falling) price of fuel isn’t felt in most parts of the supply chain right to the consumer, fuel surcharge costs compensate for the difference.
The Fuel Price – Worldwide
If you are in the logistics or shipping business, then it’s fair to say that you should keep a constant eye on worldwide fuel prices. Checking price information should be your way of keeping your finger on the pulse of the industry. This will also help you see when there might be large changes ahead – or changes in the fuel surcharge cost associated with shipping products. Lucky for you, the internet gives you easy access to worldwide fuel prices. Just check some handy websites, and you’ll get real-time information on the current fuel price from anywhere in the world – including the United States. Refer to Global Petrol Prices and Capital Counselor for two useful tools to help you keep track of the average fuel costs around the world.
Fuel Surcharge Calculator
Also thanks to the internet, you don’t have to be bothered with time-consuming calculations. Today, modern tech-aided calculators can help you calculate fuel surcharge per mile faster, and easier. The technical way to calculate a fuel surcharge is by calculating the current fuel price, minus the base fuel price. The difference is usually the fuel surcharge and calculated in practical terms (from there) using the distance traveled. Most invoices will account for fuel surcharge costs: now you know how they got there. AnyCalculator and OOIDA have useful fuel surcharge calculators for quick thinking.
The Junction LLC | Truckload Shipping
As a leader in the transportation industry, we demand excellence from our entire team. Our team at The Junction LLC strives to deliver the best possible customer service and by a desire to solve our customer’s toughest transportation and supply chain needs.
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