Fuel surcharges first became a hot topic in the transportation industry in the mid-1970s, when the U.S. Dept. of Energy (DOE) created the National Retail Average to compensate carriers for the volatile fuel prices of the OPEC oil crisis era. It operates the same way today as it did back then: Each Monday, a representative group of about 350 retail diesel outlets, including truck stops and service stations, report their retail diesel prices, which DOE uses to issue the national average diesel price for that week.
It became, by default, the baseline for the weekly fuel surcharge rates billed by the carrier. Under this scenario, if fuel prices increase during the week, the shipper wins and the carrier loses. If fuel prices fall during the week, the carrier wins and the shipper loses, according to FuelSurchargeIndex.org, a collaboration between the shipping and trucking community. FuelSurchargeIndex.org allows users to accurately calculate the fuel surcharge rate for a load based on the daily fuel prices along a particular route, rather than basing a fuel surcharge rate on the national fuel price average.
Instead of using the DOE's weekly average of national fuel costs, FuelSurchargeIndex.org provides shippers and carriers with accurate fuel prices on over 5,500 truck stops that are updated every 24 hours and specific to the route that a load is actually traveling. This provides a precise, accurate calculation of the cost of fuel for every load moved. It also lets users see auditable and verifiable fuel costs at the time of shipment, according the FuelSurchargeIndex.org.
Utilizing Fuel Surcharge Index.org also allows the user to specify whether or not to include trucking specific taxes such as IFTA, mile tax or IFTA surcharges as part of the overall fuel surcharge rate.
