Why is there still a Fuel Surcharge when gas at the pump is so low?


Recently, and rightly so,  some customers have been asking why we are still charging 8% FSC when the price at the pumps has been steadily dropping? Well, our FSC has been steadily dropping as well. It has decreased every month since July 2014. The FSC is due to be updated tomm, March 1st (we update it on the 1st of every month), and it looks like we will see a 6% FSC for shipments in March. The monthly FSC is always set at the average National price for the PREVIOUS month. The 6% for March shipments is based on the average from February 2016.

We use the same charts & method we have been using since fuel began to rise around 2005-2006, when we first implemented the fuel surcharge. This was intended to offset rising fuel costs over 65 cents per litre. We use a sliding scale that is updated on the 1st of each month based on the national average of the previous month. The average pricing data is sourced from The Kent Group’s website here: KENT GROUP. We add the national average of retail gasoline and retail diesel and average the two, then use the fuel surcharge charts to determine the current charge. Below 65 cents per litre the FSC is eliminated completely. The charts we use to calculate the surcharge can be viewed by clicking the PDFs below:

Fuel surcharge chart

Fuel surcharge chart below 95


     The surcharge has been in steady decline since July 2014 when it was set at 14.5%. Since then we have decreased the fuel surcharge every month based on the national average to where it currently sits at 8%.  As explained above, it will be updated again on March 1st and currently the national average of retail gasoline/diesel will be 89.8 cents per litre, which would put the March surcharge at 6.5%.
  I have talked to customers over the past few years that said we are the only company they know of that updates and slides the surcharge monthly based on the fluctuating fuel prices.  If any customers have other questions or comments related to the fuel surcharge, please let us know!

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