Smarter Shipping Solutions

Will Fuel Surcharges Follow Historic Dip in Gas Prices?

Will Fuel Surcharges Follow Historic Dip in Gas Prices?

Posted: May 20, 2020 |

Millions of Americans have sharply reduced daily transportation activity in recent weeks in every mode worldwide resulting in reduced demand for gas and oil.  While gas prices dipped to the lowest point in decades, COVID-19 isn’t the only factor disrupting the energy sector closely tied to transportation costs. 

A bulging supply of petroleum, and political volatility between oil producing nations could keep fuel prices low deep into 2020. Although many oil producers are reducing production, supply and demand is the key. CPC suggests fuel costs will remain at a record low, as example, JET Kero is $.50 per gallon today when it was $1.75 a year ago.  

How will low fuel charges affect parcel carriers’ fuel surcharges? And more importantly, how will shippers respond to paying these charges that can amount to a significant portion of the overall shipping cost? Keep in mind, this year, FedEx added fuel surcharges to many of its existing service charges, such as Additional Handling-Weight or Additional Handling-Packaging.

Originally surcharges were meant to protect parcel carriers when gas and diesel prices fluctuated throughout the year, although fuel surcharges have withstood the test of time, the global pandemic creates a different playing field. Introducing fuel surcharge conversations with your carriers may allow you to make judicious decisions about shipping. Surcharges appear to be the thing of the past. CPC continues to review the data and remain committed to protect the client from paying unwarranted surcharges as carriers seek to maintain revenues.

The current business environment with lower fuel costs and the several companies providing the shipping services in every mode as air, sea, trucking are now motivated to maintain their market share in today’s competitive world. Today is the perfect time to reduce shipping costs.

Let CPC ensure you have the best rates with a no cost, no obligation savings assessment. CPC will review your program and estimate the potential savings using CPC’s expertise and backed by its savings performance guarantee.   

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