What's the relationship between fuel surcharge and line-haul rates?
If you're responsible for procuring freight, you might have noticed a relationship between your fuel surcharge and your line-haul rate.
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News FeedsIf you are responsible for procuring freight, you might have noticed a relationship between your fuel surcharge and your line-haul rate. Basically, if you pay a lower than average fuel surcharge, you typically end up with a higher than average line-haul rate. But what's the exact relationship?
To find out, Massachusetts Institute of Technology Professor Chirs Caplice analyzed benchmarking data from consulting firm Chainalytics. Presenting his analysis at the Council of Supply Chain Management Professionals' Annual Global Conference, Caplice said that while the relationship is not 1:1, there is a strong correlation. With dry van full truckload shipping, for every dollar paid above the average fuel surcharge, your line-haul rates will drop—on average—by 49 cents. The impact is greater for refrigerated shipping; for every dollar paid above the average fuel surcharge, your rates will drop by, on average, 71 cents.
More articles by Susan K. Lacefield
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