Fuel surcharge explained (and how to set one up)

Fuel is one of the biggest costs in transport, and its price changes all the time. A fuel surcharge lets your price follow the fuel price, so you are not paying for every rise yourself.

How it works

You and your customer agree three things up front:

Item	Meaning
Base fuel price	The fuel price your normal rates were worked out on
Fuel share	How much of your rate is fuel (often 25% to 40%)
Review period	How often you update it - weekly or monthly

Surcharge % = fuel share x (current fuel price - base fuel price) / base fuel price

Example

Your base fuel price is 20.00 per litre and fuel is 30% of your rate. Fuel goes up to 22.00. The surcharge is 30% x (22 - 20) / 20 = 3%. A 10,000 load becomes 10,300. If fuel drops below the base, the surcharge goes to zero (or negative, if you agreed that).

Tips

Put the surcharge on its own line on the invoice so customers see it is fuel, not a price hike.
Use a public fuel price so nobody argues about the number.
Agree it in writing before the first load.

Doing this in worxTMS

worxTMS keeps fuel surcharge sheets with your base price and fuel share, works out the surcharge when you enter a new fuel price, and adds it to every load priced from that sheet. Free 30-day trial.