The drop in energy pricing combined with the considerable downward pressure on transportation pricing created by excess capacity has placed the issue of surcharges on the back burner for the moment. B...
The drop in energy pricing combined with the considerable downward pressure on transportation pricing created by excess capacity has placed the issue of surcharges on the back burner for the moment. But the only certainty about fuel pricing is its volatility and many of the inefficiencies, such as long waits at the shipping dock or the border, that surcharges are meant to address are certain to return once the economy recovers. Surcharges present an important way for motor carriers to capture revenue lost due to issues beyond their control. The carrier version of our annual Transportation Buying Trends Survey revealed that basically all motor carriers have fuel surcharges in place. The two main questions surrounding fuel surcharges, however, are whether motor carriers are truly able to recover through surcharges the entire cost of fuel when prices spike and whether they will be able to continue to make surcharges stick in the face of a North American economic downturn -one that may leave motor carriers competing vigorously for every scrap of available business. Diesel pricing has dropped significantly in recent months and a large number of motor carrier executives responding to our survey (38%) expect their fuel surcharge rates to drop in 2009 while 44% expect fuel surcharge rates to stay about the same. Only 18% expect an increase in their fuel surcharge rates. •
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