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SURCHARGES TO DROP
ALONG WITH FUEL PRICE November 4, 2014 | Freight & Trading Weekly

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With the fuel price of diesel due to fall by around 50 cents per litre on December 3, according to the latest calculations by the department of energy, road transporters’ fuel surcharges should also take a drop.
But the question remains about whether they do reduce these surcharges when the price goes down.

Surcharges to drop along with fuel price

That’s a sure thing, according to Garth Bolton, Executive of Cargo Carriers and a director of the Road Freight Association (RFA), because eagle eyes amongst his clients will certainly focus on whether he does or not.
“We pass on both increases and decreases to our clients,” he said. “They are disgruntled by increases and watch us closely, ensuring they get their decreases.

“To maintain our relationships we make sure we pass on the decreases.” It’s a very transparent process, according to Kevin Martin, chairman of the Durban Harbour Carrier’s Association (DHCA). The price of fuel is 40% of a trucker’s operating cost. So 40% of the amount of a fuel price increase can be added to the surcharge. And, similarly, 40% of any decrease can be deducted from it.

“When the fuel price increases, the surcharge goes up,” Martin said, “and when the price drops, so does the surcharge. For 99% of my industry this statement will hold true.”

But, he also pointed out that there was a difference between the long-haul and the short-haul truckers. “The long-distance transporters have to have a surcharge because of the distances they cover. For lots of short-haul transporters that is not necessarily the case.

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