Talkable Topic: Understanding the Cost of Fuel
Fuel prices feel like the fear factor of the moment. But how much do we really need to worry about the rising cost of filling up at the pump? According to finance experts, this sharp upward shift will affect the pocketbooks of the entire US population—without sparing the shipping industry.
The importance of understanding the impact that rising fuel prices have on transportation.
With the rising price of fuel, transportation businesses must decide on how to manage that increase in cost. They must choose to either take losses or increase prices to accommodate for the increased gas prices. When prices are increased, the receiver typically charges more to make up for the additional cost. This means the consumer, transporter, and shippers will feel the impact of the increased cost to fuel the transportation industry.
The importance of understanding a fuel schedule.
Fuel schedules are databases that display rates that shippers are willing to pay for the fuel consumed during the transportation of goods. These schedules give shippers and transportation companies a guide to ensure their budgets and capabilities can be met before settling on an agreed-upon price. Companies handle fuel schedules in a variety of ways. If you would like to learn more about fuel schedule strategies, our parent company, ATS, has a great article that goes more in-depth on strategies utilized by the transportation industry.
Know what resources to use to get the national average.
Shippers constantly strive to pay the most accurate price for fuel surcharges as possible, for good reason. To ensure you are getting the most accurate prices, using a third-party fuel consumption management firm is a great option. These third-party firms like Breakthrough, Walker SCM, and Newstream Enterprises, allow shippers to get the most accurate prices in the areas that their freight travels through.
Although the gas prices have cut into the pocketbooks of consumers and businesses alike, it is important to remember that the economy (and all markets alike) are constantly fluctuating in hitting highs and lows. It is only a matter of time until the market corrects itself and returns to a more comfortable state for everyone.