Warning: Fuel Surcharges for Freight

 

Market Update:

 As predicted, the cost of shipping freight is on the rise. Fuel surcharges are very much a grim reality as the price of oil and gas increases due to market conditions, time of year, and the political climate.

Traditionally, the price at the pump starts creeping up a couple of months before peak travel times, when everyone takes to the highways for vacation destinations. Prices also increase before major elections and level out or substantially decrease at the end of the contest. Unfortunately, freight costs mirror fuel prices and that expenditure is reflected in freight bills as a fuel surcharge (FSC).

However, according to the US Energy Information Administration (EIA) the price increases will be in incremental, manageable percentages. i.e., The New Jersey/Pennsylvania area has experienced a 10% increase during the month of March and at times jumping to a 14-15% FSC increase, which is proportionate with the cost of raw crude. Keep in mind that the increase is being measured from prices in a deflated market. Costs are still well below rates that would be considered normal if the world oil market were not still reeling from the collapse caused by the advent of shale oil and overproduction. The FSCs were much higher two years ago. Nonetheless, the marketplace must adjust to the fluctuating prices, and take measures to ship freight efficiently.

Our Recommendation:

TCC publishes market updates to inform those interested and involved of indices predicting market fluctuations. We make every effort to analyze the marketplace and offer solutions to help strengthen supply chains to keep prices competitive. Awareness is the key factor.

Following a few guidelines can minimize the cost of shipping—like analyzing your needs. Instead of buying supplies and materials used on a day-to-day basis when needed, and receiving multiple shipments over a long period, order bulk quantities whenever possible. Despite a higher up front cost, the substantial savings will be much more cost efficient in the end.

What we are doing for our customers?

TCC contacts new carriers every day to find the most cost efficient and reliable shippers in the marketplace. We work daily our logistics partner to continuously build a stronger network of carriers. TCC focuses on finding the highest quality carriers at the most competitive, affordable price. Keeping our suppliers and customers well informed on market conditions and offering solutions to everyday challenges is just part of our commitment to providing the best service possible.

For additional updates and information please see US Energy Information Administration (EIA) website.