In Case Study #1, an audit demonstrated some significant disparity between the fuel surcharges being applied to a shipper over the course of the year. The shipper felt confident in which carrier would be awarded business by destination after doing a review on rates plus fuel surcharge at the beginning of the year.
Here is the comparison:
With such a significant difference in range, comparing rates for this shipper is near impossible. Even though the shipper had included the fuel surcharge rates in their original cost comparison, each carrier’s variation over the course of only 12 months is so different that what the assumed cost is could be as much as 20 percentage points out when compared to the actual cost at the time of shipping.
By negotiating to have each carrier follow the same fuel surcharge, the shipper could have better accountability from their carriers, and the transparency of how the fuel surcharge would be applied would allow the shipper to make better decisions.
The carrier would benefit from knowing that their rates had been compared on an apples-to-apples basis, and that the shipper had made their decision based on all of the facts.