Don’t let your LTL/TL carrier tell you that you will have to accept a fuel surcharge pass through without negotiating the surcharge. Many companies are overpaying for a fuel surcharge.
The fuel charge is a function of miles, carrier’s MPG, density, trailer capacity, mode (TL is direct,LTL through a hub and spoke. It is based on the shipper’s pricing program. It is also based on the Transportation Management System (TMS) Optimization program at the carrier of your choice.
I just completed an LTL/TL contract with a large carrier. We set up a QBR or Quarterly Business Review. The carrier reduced the fuel surcharge by giving us points and will not have an automatic fuel surcharge, but they will negotiate it in the QBR meetings. They also reduced the TL/LTL rate because of the contract.They will share the Cost Reduction coming from the TMS Optimization program as well. After all, it is your freight the carrier is handling!
The point is that you should never accept any kind of price increase without thorough documentation from the carrier.Always ask for a discount. If you do not ask, you will not receive a discount. It is like a Salesperson asking for the order if the buyer says nothing about requirements that are just sitting on his or her desk.