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['Fuel Management']
['Fuel management']
12/01/2023
Copyright 2024 J. J. Keller & Associate, Inc. For re-use options please contact copyright@jjkeller.com or call 800-558-5011.
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InstituteAnalysisIn Depth Sub Topics (Level 4)TransportationFleet OperationsFuel managementEnglishFuel ManagementFocus AreaUSA
Implementation
['Fuel Management']
- Carriers must notify customers of the reason for a fuel surcharge and when it will be effective.
Implementing a fuel surcharge is actually quite simple. The first and most important step is notifying customers about the intent to charge a fuel surcharge. This notification should include an explanation as to why the change is being implemented and when it will take place. This should be done in a letter, which could read as follows:
Dear Customer,
As I’m sure you are aware, fuel prices continue to spiral out of control to historical levels. We have avoided seeking price relief in this area as long as we can. However, due to the critical nature of the current situation, we can no longer continue to absorb this increasing cost.
Therefore, effective (insert date), we must implement a temporary fuel surcharge on all shipments. The fuel surcharge will remain independent of our base rates and will be shown as a separate entry on our freight bill. The fuel surcharge amount will be charged on a per-mile basis, reflecting the extra cost of the fuel used for each specific trip. The rate will be calculated at the beginning of business each Monday morning for all trips originating from that Monday until the next calculation is done the following Monday.
We deeply appreciate your understanding in helping to share these fuel cost increases so that we can continue to provide the excellent service you need and desire. Working together in this way will help keep our nation strong during this time of crises. We hope that by sharing this burden together, we can keep the goods and services that power the American economy moving.
Respectfully,
(Your Company)
Below is a sample chart to give an idea of a fuel surcharge structure. The base or starting cost per gallon and the ending cost per gallon can be as modified as needed to cover the expected range of fuel prices over a long period of time. A typical surcharge schedule may run from $1.50 per gallon to $5.50 per gallon based on historical prices.
| RATE PAID PER GALLON OF FUEL (Read across to end column to determine appropriate fuel surcharge) | SURCHARGE PER MILE | ||||
|---|---|---|---|---|---|
| 3.51 | 3.52 | 3.53 | 3.54 | 3.55 | 0.48 |
| 3.56 | 3.57 | 3.58 | 3.59 | 3.60 | 0.49 |
| 3.61 | 3.62 | 3.63 | 3.64 | 3.65 | 0.50 |
| 3.66 | 3.67 | 3.68 | 3.69 | 3.70 | 0.51 |
| 3.71 | 3.72 | 3.73 | 3.74 | 3.75 | 0.52 |
| 3.76 | 3.77 | 3.78 | 3.79 | 3.80 | 0.53 |
| 3.81 | 3.82 | 3.83 | 3.84 | 3.85 | 0.54 |
| 3.86 | 3.87 | 3.88 | 3.89 | 3.90 | 0.55 |
| 3.91 | 3.92 | 3.93 | 3.94 | 3.95 | 0.56 |
| 3.96 | 3.97 | 3.98 | 3.99 | 4.00 | 0.57 |
| 4.01 | 4.02 | 4.03 | 4.04 | 4.05 | 0.58 |
| 4.06 | 4.07 | 4.08 | 4.09 | 4.10 | 0.59 |
| 4.11 | 4.12 | 4.13 | 4.14 | 4.15 | 0.60 |
| 4.16 | 4.17 | 4.18 | 4.19 | 4.20 | 0.61 |
| 4.21 | 4.22 | 4.23 | 4.24 | 4.25 | 0.62 |
| 4.26 | 4.27 | 4.28 | 4.29 | 4.30 | 0.63 |
| 4.31 | 4.32 | 4.33 | 4.34 | 4.35 | 0.64 |
| 4.36 | 4.37 | 4.38 | 4.39 | 4.40 | 0.65 |
| 4.41 | 4.42 | 4.43 | 4.44 | 4.45 | 0.66 |
| 4.46 | 4.47 | 4.48 | 4.49 | 4.50 | 0.67 |
| 4.51 | 4.52 | 4.53 | 4.54 | 4.55 | 0.68 |
| 4.56 | 4.57 | 4.58 | 4.59 | 4.60 | 0.69 |
| 4.61 | 4.62 | 4.63 | 4.64 | 4.65 | 0.70 |
| 4.66 | 4.67 | 4.68 | 4.69 | 4.70 | 0.71 |
| 4.71 | 4.72 | 4.73 | 4.74 | 4.75 | 0.72 |
| 4.76 | 4.77 | 4.78 | 4.79 | 4.80 | 0.73 |
| 4.81 | 4.82 | 4.83 | 4.84 | 4.85 | 0.74 |
| 4.86 | 4.87 | 4.88 | 4.89 | 4.90 | 0.75 |
| 4.91 | 4.92 | 4.93 | 4.94 | 4.95 | 0.76 |
| 4.96 | 4.97 | 4.98 | 4.99 | 5.00 | 0.77 |
| 5.01 | 5.02 | 5.03 | 5.04 | 5.05 | 0.78 |
| 5.06 | 5.07 | 5.08 | 5.09 | 5.10 | 0.79 |
| 5.11 | 5.12 | 5.13 | 5.14 | 5.15 | 0.80 |
| 5.16 | 5.17 | 5.18 | 5.19 | 5.20 | 0.81 |
| 5.21 | 5.22 | 5.23 | 5.24 | 5.25 | 0.82 |
| 5.26 | 5.27 | 5.28 | 5.29 | 5.30 | 0.83 |
| 5.31 | 5.32 | 5.33 | 5.34 | 5.35 | 0.84 |
| 5.36 | 5.37 | 5.38 | 5.39 | 5.40 | 0.85 |
| 5.41 | 5.42 | 5.43 | 5.44 | 5.45 | 0.86 |
| 5.46 | 5.47 | 5.48 | 5.49 | 5.50 | 0.87 |
:
fuel-management
FOUNDATIONAL LEARNING
Implementation
InstituteAnalysisIn Depth Sub Topics (Level 4)TransportationFleet OperationsFuel managementEnglishFuel ManagementFocus AreaUSA
['Fuel Management']
- Carriers must notify customers of the reason for a fuel surcharge and when it will be effective.
Implementing a fuel surcharge is actually quite simple. The first and most important step is notifying customers about the intent to charge a fuel surcharge. This notification should include an explanation as to why the change is being implemented and when it will take place. This should be done in a letter, which could read as follows:
Dear Customer,
As I’m sure you are aware, fuel prices continue to spiral out of control to historical levels. We have avoided seeking price relief in this area as long as we can. However, due to the critical nature of the current situation, we can no longer continue to absorb this increasing cost.
Therefore, effective (insert date), we must implement a temporary fuel surcharge on all shipments. The fuel surcharge will remain independent of our base rates and will be shown as a separate entry on our freight bill. The fuel surcharge amount will be charged on a per-mile basis, reflecting the extra cost of the fuel used for each specific trip. The rate will be calculated at the beginning of business each Monday morning for all trips originating from that Monday until the next calculation is done the following Monday.
We deeply appreciate your understanding in helping to share these fuel cost increases so that we can continue to provide the excellent service you need and desire. Working together in this way will help keep our nation strong during this time of crises. We hope that by sharing this burden together, we can keep the goods and services that power the American economy moving.
Respectfully,
(Your Company)
Below is a sample chart to give an idea of a fuel surcharge structure. The base or starting cost per gallon and the ending cost per gallon can be as modified as needed to cover the expected range of fuel prices over a long period of time. A typical surcharge schedule may run from $1.50 per gallon to $5.50 per gallon based on historical prices.
| RATE PAID PER GALLON OF FUEL (Read across to end column to determine appropriate fuel surcharge) | SURCHARGE PER MILE | ||||
|---|---|---|---|---|---|
| 3.51 | 3.52 | 3.53 | 3.54 | 3.55 | 0.48 |
| 3.56 | 3.57 | 3.58 | 3.59 | 3.60 | 0.49 |
| 3.61 | 3.62 | 3.63 | 3.64 | 3.65 | 0.50 |
| 3.66 | 3.67 | 3.68 | 3.69 | 3.70 | 0.51 |
| 3.71 | 3.72 | 3.73 | 3.74 | 3.75 | 0.52 |
| 3.76 | 3.77 | 3.78 | 3.79 | 3.80 | 0.53 |
| 3.81 | 3.82 | 3.83 | 3.84 | 3.85 | 0.54 |
| 3.86 | 3.87 | 3.88 | 3.89 | 3.90 | 0.55 |
| 3.91 | 3.92 | 3.93 | 3.94 | 3.95 | 0.56 |
| 3.96 | 3.97 | 3.98 | 3.99 | 4.00 | 0.57 |
| 4.01 | 4.02 | 4.03 | 4.04 | 4.05 | 0.58 |
| 4.06 | 4.07 | 4.08 | 4.09 | 4.10 | 0.59 |
| 4.11 | 4.12 | 4.13 | 4.14 | 4.15 | 0.60 |
| 4.16 | 4.17 | 4.18 | 4.19 | 4.20 | 0.61 |
| 4.21 | 4.22 | 4.23 | 4.24 | 4.25 | 0.62 |
| 4.26 | 4.27 | 4.28 | 4.29 | 4.30 | 0.63 |
| 4.31 | 4.32 | 4.33 | 4.34 | 4.35 | 0.64 |
| 4.36 | 4.37 | 4.38 | 4.39 | 4.40 | 0.65 |
| 4.41 | 4.42 | 4.43 | 4.44 | 4.45 | 0.66 |
| 4.46 | 4.47 | 4.48 | 4.49 | 4.50 | 0.67 |
| 4.51 | 4.52 | 4.53 | 4.54 | 4.55 | 0.68 |
| 4.56 | 4.57 | 4.58 | 4.59 | 4.60 | 0.69 |
| 4.61 | 4.62 | 4.63 | 4.64 | 4.65 | 0.70 |
| 4.66 | 4.67 | 4.68 | 4.69 | 4.70 | 0.71 |
| 4.71 | 4.72 | 4.73 | 4.74 | 4.75 | 0.72 |
| 4.76 | 4.77 | 4.78 | 4.79 | 4.80 | 0.73 |
| 4.81 | 4.82 | 4.83 | 4.84 | 4.85 | 0.74 |
| 4.86 | 4.87 | 4.88 | 4.89 | 4.90 | 0.75 |
| 4.91 | 4.92 | 4.93 | 4.94 | 4.95 | 0.76 |
| 4.96 | 4.97 | 4.98 | 4.99 | 5.00 | 0.77 |
| 5.01 | 5.02 | 5.03 | 5.04 | 5.05 | 0.78 |
| 5.06 | 5.07 | 5.08 | 5.09 | 5.10 | 0.79 |
| 5.11 | 5.12 | 5.13 | 5.14 | 5.15 | 0.80 |
| 5.16 | 5.17 | 5.18 | 5.19 | 5.20 | 0.81 |
| 5.21 | 5.22 | 5.23 | 5.24 | 5.25 | 0.82 |
| 5.26 | 5.27 | 5.28 | 5.29 | 5.30 | 0.83 |
| 5.31 | 5.32 | 5.33 | 5.34 | 5.35 | 0.84 |
| 5.36 | 5.37 | 5.38 | 5.39 | 5.40 | 0.85 |
| 5.41 | 5.42 | 5.43 | 5.44 | 5.45 | 0.86 |
| 5.46 | 5.47 | 5.48 | 5.49 | 5.50 | 0.87 |
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Copyright 2024 J. J. Keller & Associate, Inc. For re-use options please contact copyright@jjkeller.com or call 800-558-5011.