How do you ask a Shipper to start paying a Fuel Surcharge?
Asking a shipper or broker to pay a fuel surcharge feels risky because it means raising your price, and you could lose the business. The good news is that fuel surcharges are standard in trucking, so the conversation is about how yours is calculated, not whether you should have one.
Put it in writing before the load
The easiest time to agree on a fuel surcharge is when you set up the customer or negotiate the rate, not after fuel prices jump. Ask that the surcharge terms appear on the rate confirmation or in your contract, and shown as its own line, separate from the base rate, on your invoice. If a broker's rate confirmation says the rate is "all-in", the surcharge is part of the number, so compare it with your own costs.
Use a published index
Base the surcharge on a public number that both sides can check. The U.S. Energy Information Administration publishes weekly retail on-highway diesel prices, nationally and by region. A common approach is to pick a base price per gallon that your rates already cover (for example the average at the time you set the rate), then charge a set amount per mile for each increment the weekly price rises above it. Your miles per gallon decides the per-mile amount.
If you have to raise it with an existing customer
With a customer you have worked with for a while, start with a phone call and follow up with a letter that spells out the details. Before you raise anything, check what the market is doing and tread carefully. Here is a sample letter you can adapt:
Your Company
Address Here
City, State Zip
Date
Mr. Shipper
123 Main Street
Your Town, USA 12345
Dear Sir or Madam:
Thank you for your business. Diesel fuel is one of our largest costs, and it has risen to the point where we can no longer absorb the increase in our base rates.
Beginning with loads picked up on [date], we will add a fuel surcharge to each shipment. The surcharge is separate from our base rate and will be shown as its own line on our invoices. It is calculated per mile from the U.S. Energy Information Administration's weekly national average on-highway diesel price, using the price published for the week of pickup. The surcharge is [amount] per mile for each [increment] the average price is above [base price] per gallon, and it will go back down when fuel prices do.
We appreciate your understanding and look forward to continuing to serve you.
Respectfully,
Name
Company
Track it on every load
Make sure every invoice shows the surcharge and that you are paid it on every load. A fuel surcharge you agreed to but forgot to bill is money lost. Trip Sheet Central's invoices are built from the trip, so the freight charge and any additions are on the invoice when you send it.
How do you handle fuel surcharges with your customers? Send us a note at support@tripsheetcentral.com.