OOIDA Foundation updates its fuel surcharge education

With the current state of the fuel market, the OOIDA Foundation continues to provide updated information on how to make sure your business remains a successful enterprise – notably, fuel surcharges and the necessity to incorporate them in your business due to the volatility of the market.

A March 10 update authored by the OOIDA Foundation expressed the importance of implementing a fuel surcharge and provided instruction on how to calculate your rate.

Additionally, the Foundation features a surcharge calculator tool right on its website to assist with the process.

The OOIDA Foundation website said, “Knowing your cost of operation as well as what you are allowed to recoup in fuel charges is key to your success.”

Foundation offers update

To further expound upon and clarify best practices regarding surcharges, the OOIDA Foundation recently updated its informational fuel surcharge webpage.

The page details what you need to know, what a surcharge actually is, key terms to understand and how it works.

Carriers typically increase their fuel surcharge 1 cent for every 6-cent increase in diesel price above their established baseline, the Foundation website says.

Outside of providing a concrete example of how to calculate your surcharge, the OOIDA Foundation offers a list of key takeaways:

• A surcharge isn’t meant to cover the complete cost of fuel.
• You cannot get around knowing your cost of operation, meaning you need to know how much to charge in order to make a profit.
• Most owner-operators running under their own authority operate in the spot market, meaning they go through brokers to obtain freight rather than having a contract with a direct shipper.
• Brokers don’t typically pay a surcharge, so you will want to incorporate your surcharge in your all-inclusive rate negotiators.

Currently, there is no rule, law or regulation mandating a fuel surcharge. However, if you have not incorporated one into your operation, you must do it now, the Foundation website says.

The Foundation has templates on its website to assist you with broaching the subject with regular customers, a new customer, carriers, and even advice regarding fuel cards.

For the Foundation’s full surcharge calculator section, click here. LL