Car Transport & Fuel Surcharges
Transport operators work on extremely tight margins with fuel costs constituting anywhere between 15% and 36% of the total cost of transport, they have already eaten into tight margins forced many car carriers out of business.
The rising cost of fuel is enough to drive many transport operators to the brink.
By attaching a fuel surcharge (or fuel levy) to their costs, transport operators are spreading the burden of what is an uncontrollable outside influence on their operating costs.
What is a fuel surcharge?
A fuel surcharge is a charge applied by domestic and international transport operators to cover the cost of drivers’ fuel needs.
The exact amount at which the fuel surcharge is set reflects movements in the price of diesel fuel from time to time and, as you know, these prices can fluctuate enormously over time.
By applying its own base fuel price (surcharge), a carrier effectively seeks to hedge against future future fuel price rises by setting the surcharge to the price of fuel as at the date that their quote was submitted to the customer.
How Does the Fuel Surcharge Work?
Each month, the car transport company tracks changes in domestic diesel and jet fuel prices (measured over a three month period) against a weighted benchmark of diesel fuel prices.
How Often Does the Fuel Surcharge Change?
Transport operators will generally update their fuel surcharges monthly. In some instances, they may fix fuel surcharges for a period of 3 or maybe even 4 months at a time.
How will customers know the fuel surcharge amount?
Sometimes, transport companies will hide costs from customers until it’s too late. Be sure to ask what the total amount you’ll need to pay is going to be. Make a point of confirming both the base cost of transport includes the fuel surcharge.
The last thing you want is an invoice containing additional overheads when you pick up your vehicle. Or, worse still, that the transport company won’t release your vehicle until it’s all paid up in full.
When evaluating a car transport quote, make sure they are inclusive of fuel surcharges and GST so you know exactly how much you’ll need to pay.
Also check there are no hidden “Government charges”.
Be Aware of Fuel Surcharges
As a customer, the onus is on you to be informed of fuel surcharges. Sometimes, this information is not forthcoming, or is held in the fine-print.
If you’re contacting a car carrier or vehicle transport provider to confirm the costs, be sure that you receive (in writing) that the costs include all charges and levies.
If you’re receiving car transport quotes online, confirm that the fuel levy is either included in the price or is clearly listed as a separate item.