A fuel surcharge (FSC) is an additional fee that carriers add to cover the varying fuel costs. This charge helps manage the impact of fuel price fluctuations on shipping operations.
Fuel surcharges are typically calculated as a percentage of the base shipping rate or as a per-mile charge, adjusted according to current fuel prices. This makes sure that carriers can maintain consistent service levels despite changes in fuel costs.
The FSC affects overall shipping costs, impacting both shippers and receivers. By incorporating fuel surcharges, carriers can manage fuel cost volatility without compromising their operations.
Example
A logistics company ships goods nationwide. When fuel prices rise, the carrier adds a fuel surcharge to the shipping rate, covering the increased fuel expenses while maintaining service quality.