fuel surcharge percentage of the line haul or by the mile?

Here's how I used to do it-

The benchmark for your surcharge would be calculated based on the DOE on-highway diesel price for your region on the date the shipper base rate was negotiated, found here:

http://www.eia.gov/petroleum/gasdiesel/


Let's say the base rate negotiated was $2.00/mi, and on that date the on- highway diesel price was $3.00/gal. That would be your benchmark. This week the national price for diesel is $3.98/gal. So there's a $.98 difference that you want to recoup.

Using 5 mi/gal as the multiplier, your fuel surcharge would be 1 cent a mile for every 5 cents a gallon in diesel price increase/decrease.

98/5= 19.6, we'll round it off to 20 cents.

Now, all you have to do is convert that 20 cents to a percentage of the base rate:

.20/2.00= 10%

So your fuel surcharge for the current billing week would be 10% of the base rate.

 

Sorry, I was out on a business trip. Cleaned out the pm box and sent you one BH.

 

You'll typically find FSC as a percentage on LTL shipments by the large LTL carriers.

 

My outfit pays fuel surcharge by the mile, with rates that vary based on the weight of the shipment.

 

We set a minimum per mile rate based on the corporate average fuel price. You're guaranteed to get that, but you also get anything else collected from the customer. I don't recall a week that the average collected fuel surcharge rate was the minimum rate.