Rising fuel surcharges for large courier services
Rising fuel surcharges for large courier services
Wednesday, Oct 18, 2017

Fluctuating fuel prices effect the big-name distribution companies and courier services, shaking the roots of their organisations and proceeding to logistically influence every other aspect of their supply chain.

Whether it’s a local delivery or an oversea transfer, every couriers travel is weighted down to some degree by the cost of fuel. Additionally, oil prices have now reached a two-year high, pushing inflation above 3% while threatening the general British economy. The figures are subject to change frequently both nationwide and globally, as is customary with fuel prices. Consequently, this constant impact on courier services is worth examining closer. After all, the price of petrol and diesel are among the main expenses in the day-to-day operations of a courier service.

The surcharge system is reflective of price rises, the tail end of any value inflation in a business niche and operating as a type of tax. Adjusted normally on a by-monthly basis, the UK fuel surcharges are determined by the forecourt price of diesel, charting escalations or plunges in prices for diesel and petrol. Ultimately, it all functions like a sub-economy for any freight business venture, alternating between national and international rates.

In close accordance with these varying statistics, courier services adapt in response, adjusting their extra cost rates to run cohesively with any changes at home or abroad. For UK based courier company TNT, their latest national surcharge level for October is marked at 6.50%, rerouting back to their previous percentage from July-September of this year. The expenses are ever evolving, an unpredictable wrench thrown into the world of timely delivery. However, while TNT adjust the amount and duration of the surcharge independently, others warp this method by breaching government policy.

Of course, not everyone plays ball, with The American Fuel & Petrochemical Manufacturers (AFPM) challenging decisions on car tank surcharges by launching petitions for legal action. The event came from BNSF rail company overruling its governments surcharge laws, with the first complaint being filed in April 2016. Consequently, there is a danger in overstepping laws when it comes to setting surcharge terms, with many feeling “penalized” than simply complying with a corporate protection policy. This marks a stark transition, from cost stability to carrying out a personal vendetta, an image consumer facing courier services will not want to adopt.

TNT avoid such schemes, with their practices serving to strengthen the ties between courier and customer. Their services come with a variety of supplement options depending on region and circumstance, with remote areas reachable at extra costs too. The charges spread across international, economy and special expresses at the rate of €0.05 per kilo and €0.09 per kilo in airfreight services. Ultimately, as TNT have no general cost exploiting all sectors, their tariffs are instead modified accordingly to each requirement of the customer, striking up a series of fairer deals in the process.

While some courier customers may pay more for fuel, many on poorer incomes become deterred from higher prices and use surcharged services less. Courier services such as FedEx have reported a loss of customers due to inflated oil prices since 2011, displaying these effects in action. Furthermore, the padding of prices effects the individual in a distribution service, particularly in urban areas. For example, surcharge rates in the cityscape force others to find greener ways of getting around, the taxing helping the environment. Of course, this incites speculation from others that the surcharges are punishing those with diesel vehicles, coming in at 24 hour £12.50 charges unless driving the newest diesel offerings. Put simply, many feel price stabilities have not yet been found.

However, TNT exemplify fairer methods in their international fuel surcharges, retaining their integrity and customer trust. Drawing their figures from the destination of a shipment and the London Brent Crude oil spot price as published by the World Bank, their tariffs are absent of an agenda. Ultimately, despite a rise in their fuel surcharge rates, their methods are clean and transparent, establishing TNT as a reliable courier service in an unpredictable system.

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