Need for fuel surcharges intensifying, trucking association says

by Canadian Shipper

The continued pressure on diesel fuel prices, in part reflecting market jitters over the ongoing tensions in the Middle East, is intensifying the need for fuel surcharges, says Ontario Trucking Association President David Bradley.

"Shippers and carriers are going to have to co-operate again. The economy is picking up steam and this will increase the demand for freight transportation service," Bradley added.

The Freight Carriers Association of Canada (FCA) monitors carrier fuel costs on a weekly basis. Canadian diesel fuel prices (ex. GST) are up about 34% in the last 5 months. FCA is suggesting that as of April 8th, a Canadian domestic fuel surcharge calculation for LTL carriers of 2.6% and for truckload carrier of 6%.

These recommendations reflect industry averages based primarily on bulk fuel purchases.

"Many carriers are no doubt suffering greater cost increases and certain specialized segments (e.g., heavy haul) also have higher than average fuel cost to revenue ratios. Where carriers have a mix of Canada/US fuel purchases adjustments may be made to reflect somewhat higher costs in Canada," the OTA says, adding that , for example, FCA is recommending that carriers with a 40/60% Canada-US split should be looking at fuel surcharges of about 1.7% (LTL) and 4.1% (TL).

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