Why Fuel Surcharges Matter and How to Tackle Them

In the world of transport and logistics, fuel costs are not just a minor detail; they are a critical component of your total expenses. With fuel prices swinging unpredictably, accurately calculating fuel surcharges is essential. Yet, the process of doing so is anything but simple.

Typically, managing fuel surcharges involves a few cumbersome steps:

1. Track Fuel Prices: Stay on top of diesel price, kerosene price or similar indicators, which can vary widely by region and over time.

2. Recalculate Surcharges: Update your fuel surcharges regularly—often monthly or even weekly—to reflect the latest price changes.

3. Communicate Changes: Notify your partners about updated surcharge percentages, ensuring everyone has the latest fuel surcharge percentage.

When you’re handling multiple shipments, manage multiple rate cards, and meeting tight deadlines, this process can feel overwhelming. Beyond the effort involved, relying on manual tracking leaves room for costly errors, from miscalculations to miscommunications. It’s a heavy burden for any logistics team, but good news! This process can now be automated.

Automating your fuel model

Managing fuel surcharges doesn’t have to be a source of stress. Transmate’s Fuel Model feature is designed to take the complexity out of the process, ensuring you spend less time worrying about calculations and more time focusing on growing your business. Let’s dive into how this tool simplifies everything:

1. Automatic Tracking of carrier surcharges

Keeping up with carrier fuel surcharge updates can feel like chasing a moving target. Transmate simplifies this by actively monitoring carrier websites for published surcharge rates. No more endless searching or missed updates—the tool does the heavy lifting, keeping you informed with minimal effort.

Bookmark the carrier pages, or subscribe to the notifcations to get the latest updates. When using Transmate's rate cards, you can select a carrier fuel model. This ensures that invoice audits, cost simulations or calculations will always usee the correct fuel surcharge.

Fuel price trackers

Explore fuel price trackers on the fuel tracker page.

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2. Automatic fuel models using fuel price trackers

When publishing a fuel model yourself or your carrier (or forwarder) only provides the fuel price tracker and a formula, the carrier surchage tracker is of little use. Therefore, Transmate has created a free tool that allows you to select a fuel price tracker, setup the formula and rules while the tool takes care of the rest. Using real-time fuel price trackers and an automated calculation approach, errors can be reduced, while saving time in figuring out the latest surcharge percentage. Depending on the fuel price indicator, you can create fuel models that are updated weekly or monthly.

Following these steps, you can setup your fuel model:

1. Select a price tracker. For example weekly:EUR-diesel-DE tracks the weekly diesel price in Euro in Germany as per EU's energy department weekly reporting
2. Define a calculation method:
   • versus a historic price point, applying a formula
   • using a range table, converting a price range into a fuel surcharge percentage
   • using a custom formula
3. optionally add supply chain partners or add the fuel model to Transmate rate cards
4. optionally publish the fuel model and trigger automated notifications

Upon saving, Transmate will generate the surcharge percentages based on the tracker values for each period. Each new data point of the fuel tracker will generate an updated surchage percentage, and can optionally triggers a notification to the subscribed partners.

To read more about fuel surchages and how you to set up formulas, check this blog post.

3. Seamless Rate Card Integration

With Transmate, you can integrate fuel models directly into your rate cards, unlocking powerful benefits:

• Calculate Accurate Surcharges: Apply the correct surcharge on specific dates with ease.

• Audit Invoices Efficiently: Ensure invoices reflect the appropriate fuel percentages, saving you time and hassle. When auditing invoices, the correct surcharge percentage will be calculated from the rate cards.

• Benchmark Rates Effectively: Simulate rates from various transport partners including the fuel percentage.

As an example: when using the TMS, the fuel surcharge will be applied onto the base rate. The shipment's pickup date will be used to determine the period of the fuel surcharge (for road transport). The rate will then show up under costs as:

In the example above you see the various cost components, and the fuel surcharge added as an item. Apart from the TMS, this is also available through the API (rate management module) or the Tenderify RFQ bidding module.

4. Effortless Collaboration with Partners

Transparency and communication are key in logistics, and Transmate makes this simple. Share your fuel models effortlessly through automated emails or a live link that provides real-time and historical surcharge percentages. This ensures your partners always have the latest information at their fingertips.

Why You’ll Love Transmate’s Fuel Model

• Time-Saving: Automate tedious tasks and focus on what truly matters—growing your business.

• Accuracy: Eliminate human errors and ensure precise fuel surcharge calculations.

• Transparency: Keep all your partners in the loop with real-time data sharing.

• Free tool: And the best part? The Fuel Model is absolutely free to start using today!

Fuel surcharges shouldn’t burn a hole in your logistics operations. With Transmate’s Fuel Model, you can navigate the volatile fuel landscape with confidence and ease. Ready to streamline your fuel surcharge management? Start using Transmate’s Fuel Model for free today!