Supply Chain Expertise and Technology Blog by TMC, a division of C.H. Robinson

Archives for October 2012

Anatomy of a Fuel Surcharge Program: Part 3

fuel surcharge

The Ups and Downs of Escalators

This week we continue our series on truckload (TL) fuel surcharges. If you’ve read my last two posts you will know why I’m skeptical that moving the index and peg or base – two components of fuel surcharge programs – can save money for shippers. Now it’s time to put another variable, the escalator or multiplier, under the same microscope. Read More…

- Director of Consulting Services, C.H. Robinson
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Anatomy of a Fuel Surcharge Program: Part 2

fuel surcharge

Finding a Peg that Fits Your Operation

Welcome back to our series of posts on fuel surcharges. Last week we focused on the index portion of truckload (TL) fuel surcharges. This week we tackle the role of the peg or base. Can changing your peg reduce the amount of money you spend on TL transportation?

Let’s start by defining the peg or base. Essentially, this variable is a floor rate for fuel that does not trigger a surcharge. When diesel prices move above or below the base figure then credit and debit surcharges kick in. Read More…

- Director of Consulting Services, C.H. Robinson
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Anatomy of a Fuel Surcharge Program: Part 1

Fuel_2

Does The Choice of Index Matter?

We often hear shippers argue that they can cut the cost of truckload (TL) fuel surcharges by using a low estimate of diesel prices when calculating the charges. The prices are drawn from an appropriate industry index. It’s an appealing theory – but does it work in practice?

The price of diesel is one of the main components of fuel surcharges. Over the next few weeks we’ll look at each of these variables to clarify how changing them impacts TL transportation costs. We’ll round off the series of posts with a general assessment of where we think these programs are headed.  Read More…

Setting Your Procurement Clock

fresh procurement

Last week, Chris Brady and Kevin McCarthy reviewed some of the approaches taken by shippers to timing Truckload (“TL”) procurement events. In this post, we take a look at factors that influence these buying strategies.

As McCarthy has argued in several TMC posts, second guessing the TL market by trying to buy when freight rates have hit bottom is chasing fool’s gold.  It’s impossible to predict market movements with certainty, so the chances are that your timing will be off.   Read More…

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