Shipping and transportation are important pillars of a country’s economic stability. Therefore, fuel can be a costly part of it. Most shipping companies change their fuel rates owing to the fluctuation in market rates. It means the fuel charges you fix for your freight cost cannot be a fixed fee.
Shipping companies in the USA have started adding fuel surcharges on top of their base rates, which can be profitable for some freight transportation services. You may not know the negotiable fuel costs. Therefore, it’s important to calculate the fuel charges for the betterment of your tracking.
Know about the fuel surcharges and their calculation
While you work for freight transportation services, you need to know all the factors that need to calculate the fuel cost. Here are some of them.
The fuel cost
The carrier determines the fuel cost based on the market price or the fuel cost. It is because if the fuel cost goes high, the company doesn’t face problems with it. Three major carriers, UPS, FedEx, and DHL, start with the same market price of fuel. . However, their base fuel rate sometimes looks quite different.
Steps to calculate fuel charges
Now it’s understandable how relevant the fuel surcharges are for your company. Let’s review the steps required for this calculation.
Step 1 Go through the EIA’s regional fuel prices
The EIA stands for Energy Information Administration in the USA. Before calculating fuel surcharges, you need to know the updated fuel price of EIA from their official website. The EIA usually updates its fuel price every Monday. The fuel type and location break down its price. You have to extract the fuel base price and actual fuel price from the dataset to complete the first step of fuel surcharge calculation.
Step 2 Determine your Vehicle’s fuel consumption rate
Fuel prices are not the only metrics while calculating the fuel surcharge. You have to consider your vehicle’s fuel consumption per mile. You can evaluate the consumption of your vehicle using a simple formula. Therefore, you need to divide the number of miles by the number of gallons of fuel you put into your tank over a fixed period.
Step 3 Calculate your fuel surcharge rate
When you know the vehicle’s fuel usage per mile, you can calculate the fuel surcharge fee. This metric keeps you informed how much more fuel costs for every mile you drive and calculates using the fuel base rate.
Step 4 Calculate the Fuel surcharge fee for the entire trip
After knowing the fuel surcharge fee per mile, you can determine the final fee for your entire trip. You have to multiply your surcharge fee per mile by the total number of miles driven during the delivery of the product.
Step 5 Keep a detailed fuel purchase dataset
It’s often crucial to track your fuel if you want to charge an accurate fuel surcharge fee. Therefore, you better maintain clear documentation every time while purchasing fuel. After all, it is always helpful to have a database.
Conclusion
Quick transfer Inc. of the USA always maintains such metrics while calculating fuel surcharges. Therefore, it’s better to rely upon them to make a shipment of your product by road or water through their service
Comments