Betting on Fuel Price Ups, Downs

For much of 1999 and 2000, truckers have struggled to survive in the face of what seem to be endlessly rising prices for diesel fuel.

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Survival strategies include surcharges, fuel optimization programs and hedging.

While surcharges can ameliorate the effect of fuel prices to some extent, the carriers need to have strong relationships with their customers for the option to work well. Customers tend to resist rate surcharges triggered by fuel prices, and in situations involving broad competition, small- to medium-sized trucking companies have found it virtually impossible to make the additional fees stick.

Many carriers are making use of computerized optimization programs that steer drivers to the lowest spot prices for fuel on their routes. But such programs are beneficial only if drivers are fully cooperative, using only authorized fueling stations.

For the full story, see the Aug. 14 print edition of Transport Topics. Subscribe today.