Excerpt from: North America Supply Chain and Logistics Strategy
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| June 16, 2008 | | With the increasing fuel prices, the fuel surcharge from transportation providers continues the rise. | Have you looked at your transportations spend recently? The cost of fuel is driving the fuel surcharge up. For example in March of 2008 you paid an additional 18.5 percent on an overnight parcel package. Today you are paying an additional 28 percent and in July the fuel surcharge is increasing to 32.5 percent. Both FedEx and UPS base their fuel surcharges on the rounded average of the U.S. Gulf Coast (USGC) spot price for a gallon of kerosene-type jet fuel. The use the price from two months prior to determine the current surcharge (example they are using the price from May to determine the surcharge in July). With the cost of fuel increasing the surcharges will continue to increase throughout the summer and the effects will be felt through the fall.
Is your company prepared for the additional shipping costs? Are you able to push these costs onto the customer? If not then having the best shipping rates available could help alleviate the increasing fuel surcharge. | | |
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