Introduction
A fuel surcharge is an additional fee that haulage and transport companies use to balance out changes in diesel prices. Since fuel costs can fluctuate weekly, surcharges help carriers keep their base haulage rates stable while covering increases at the pump. These charges are usually linked to official fuel price indexes, making them a fair and transparent way to share rising costs.
Key features in Qargo
Automatic calculations applied through invoicing based on rate card configurations
Customer-specific calculations can be set for each customer
Flexible calculation methods include percentage based and price indexed calculations
Terminology
Fuel Surcharge (FSC). An extra fee added to transport costs to cover fluctuations in fuel prices.
Base Rate (or Linehaul Rate). The standard charge for moving freight, excluding extra costs like fuel surcharges, tolls, or accessorial fees. This stays steady while the surcharge changes with fuel prices.
Price Index. A government-published or industry-recognised average price of diesel fuel (e.g., UK’s Department for Energy Security and Net Zero weekly fuel data). Carriers use this as the benchmark for calculating surcharges.
Percentage Index. A structured table or formula linking fuel prices to a surcharge percentage. As fuel prices rise above the agreed base level the surcharge % increases.
Configuration
Create Fuel Surcharge Template
Navigate to RATES > Order Input and click Price Index (fuel surcharge).
Click 'New Price Index' to begin adding a new Fuel Surcharge.
Enter a Name for the fuel surcharge index and complete any additional details, including description
Add the appropriate VAT for invoices (both sales & purchase if applicable)
Add appropriate nominal codes assigned for sales / purchase invoices;
This will ensure the fuel surcharge is allocated and imported to the correct chart of accounts
Select the INDEX method, options include:
Price index: based on a fixed value.
Use this option if looking to calculation fuel surcharge based on a price index value; or if looking to only calculate fuel based on a % of charge
Percentage index: based on a percentage.
Use this option if looking to calculate fuel surcharge based on a percentage rate applied across ALL or just the transport charges.
Configure Price index
Price index uses a base index value, with tiered rates configured based on the date and an associated index value.
Set the percentage of fuel costs in the field 'Fuel: % of the total cost';
Can be allocated up to 100%
A specific amount can be selected that represents the fuel component within the total value of the charge, ie: 50% of charge = fuel cost.
If applying 100% this will apply the calculation across the total value of the charges specified
Add Default Index list values.
Enter the Valid from date
Add the Price Index value
📚 Orders that have a collection date which falls within the Valid from date, will use the corresponding assigned Value.
Activate the applicable transport service that the fuel surcharge applies to
Use the 'Link rate card' to add the surcharge to the rate card(s) as applicable.
Add the Fuel surcharge Base value to the rate card
‼️ Be sure to click SAVE before navigating away from the page ‼️
Configure Percentage Index
Percentage index uses tiered rates configured based on the date and an associated % value
Add Default Index list values.
Enter the Valid from date
Add the Price Index value
📚 Orders that have a collection date that falls within the Valid from date, will use the corresponding assigned Value.
Activate the applicable transport service that the fuel surcharge applies to
Use the 'Link rate card' to add the surcharge to the rate card(s) as applicable.
‼️ Be sure to click SAVE before navigating away from the page ‼️
How is the fuel surcharge calculated?
Price Index Calculation:
On an order, the price will be calculated as follows:
(Value in Surcharge - Base Value assigned to the Rate card) / Base value * by % set in the Fuel % assigned = Price index rate
Calculated in order:
Percentage Calculation
On an order, the price will be calculated as follows:
Specified charges * % rate based on valid from date
Compares collection date to determine appropriate valid from date
Calculated in order:
Customer specific rates
Create customer specific fuel surcharge rates in the same Surcharge table
Navigate to the Fuel Surcharge
Click 'Add customer specific index'
Complete the Valid from date and Value / %; depending on the Index type selected
Click SAVE.
