FUEL SURCHARGE
Every company in the transport industry includes a fuel surcharge. Here is an explanation of how we calculate ours.
In general, a surcharge is an extra charge added to the cost of a product or service. This charge is similar to a government tax on certain goods or services, but levied by pivate companies and individuals. Surcharges are also more subject to change over time.
The fuel surcharge is used in the transport industry where the changes in oil prices directly affect fuel prices. Companies apply the fuel surcharge to the prices of their services to make up for these unforeseen changes in fuel costs. Although most common in the shipping and freight industries, fuel surcharges are often used in passenger transportation services such as airlines or taxi cabs. Often the fuel surcharge is folded into the final price, and so many customers are not aware that it is included.
In the shipping and freight industries, the fuel surcharge usually changes monthly and is published on each company's website. There is no universal formulas for its calculation, however, multinational transport companies have a standardised calculation, and we have chosen to follow that convention. Every month, we consult the petrol prices published by the American Energy Information Administration and their recommended fuel surcharge for each type of transportation. This is based off of the average petrol price for the past three months.
What you will see on your invoice will depend on the type of freight you use. In the case of Air Freight, the fuel surcharge will be included in transport costs, with the exception of shipping to Asia. For air shipments to Asia, the surcharge will be listed separately.
For Sea Freight, the surcharge will be included in the BAF (Bunker Adjustment Factor).
For Road Freight, the fuel surcharge may or may not be listed separately, depending on the service and provider used.