Thursday, January 9, 2014

Cut Fuel Surcharges, Let Fuel Come to the Trucks

Some services make customers pay for the amount of fuel that would be used to complete the service such as airlines. This is known as “fuel surcharge,” possibly one of few instances where the cost of fuel is passed onto the customers. Unfortunately, as far as customer satisfaction is concerned, this is among the least understood aspects of pricing goods and services.
Suppose you like to buy cheese from Wisconsin, but you live in neighboring Minnesota. Trucks or delivery vehicles have to make the long trip across the border to deliver the cheese to your doorstep, if not to your local grocery store. This is likely the reason for Wisconsin cheese being more affordable in Wisconsin than in the rest of the country. You’re paying for the logistics.
It’s unclear how much fuel surcharges affect food prices, but this is basically how fuel surcharges work. Many people don’t like the idea, but businesses run on black gold. If the average cost per mile is pegged at $1.00 for truckers, at least 35 cents go to making sure the truck is all tanked up.

Onsite fuel services reduce fuel surcharges by bringing the fuel to the fleet instead of the other way around. Trucks and logistics vehicles can leave the premises with a full tank instead of traveling to the nearest gas station to do so. If the truck has some gas left, onsite refueling will fill the remainder without the truck going anywhere.


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