Courier fuel surcharges – are they dropping fast enough?
The major supermarkets have all cut the cost of diesel to under £1 per litre. Great news you might think, but Tamebay reader Stuart asks “Why haven’t courier fuel surcharges fallen?”
Most couriers have a fuel surcharge and Royal Mail also charge around 3% surcharge. The idea of fuel surcharges is that rather than renegotiating contracts when fuel prices go up, couriers simply adjust their fuel surcharge. However with prices plummeting should fuel surcharges also be dropping?
Current courier published fuel surcharges
The most transparent courier for fuel surcharges is DX who at annual price reviews roll existing fuel surcharges/rebates into the delivery tariff. At the same time the base price for diesel is reset to the market price according to the AA at the time. From then on for every 1p rise or fall in the price of diesel DX apply a 0.175% fuel surcharge or reduction to monthly invoice.
DX claim to be totally transparent calling their fuel surcharges “Fair and honest: surcharges go up and down in line with published prices”. Here at Tamebay we applaud their monthly adjustment and wonder why all couriers don’t do the same.
Of course some couriers will claim that they buy diesel many months in advance and so prices don’t rise and fall in line with the prices we see at the pumps. That may be the case, but it does invite complaints that fuel surcharges are being used as extra profits.
Have you seen your fuel charges fall over the past six months? If not you should expect to see a drop as fuel prices are expected to drop still further, perhaps as much as another 10%, although it’s likely there’ll be a 2p/litre fuel duty increase in April which will offset some of the price drops.
You will probably find that this is because this is how couriers bulk out there income/profits.
When clients are constantly trying to drive down rates you’ll find fuel surcharges will either no move or go up. Not really seen many carriers reduce this yet.
Carriers that we’ve challenged either don’t answer the question and say “its just how it is” or they use the excuse of “buying fuel up front”.