LTLs Impose Fuel Surcharges as Diesel Prices Climb

For the first time since January 1998, some of the biggest U.S. trucking companies are hitting shippers with rate surcharges, triggered by rising fuel prices.

And shippers, scrambling for trucking capacity, apparently are willing to swallow the costs with minimal complaint.

Major less-than-truckload carriers reacted to rapidly rising diesel fuel prices — totaling 5.5 cents a gallon in the past five weeks. As of July 12, the national average retail price of diesel fuel had reached $1.114 a gallon, up 1.2 cents from the previous week and the highest level in the past 18 months.

Although the price hovered below the surcharge level for most of the truckload sector, it was enough to trip thetrigger at Yellow Freight System and other LTL giants.

Keyed to a fuel price of $1.10 a gallon, Yellow implemented a surcharge on July 12 for freight not covered by contract. The Overland Park, Kan.-based carrier last imposed surcharges in September 1996, when diesel was $1.289 a gallon. The price rose as high as $1.329 in 1997, and Yellow’s surcharge remained in place until January 1998. That is when the fuel price dropped below $1.10.

Yellow spokesman Roger Dick said the company had already discussed surcharges with many of its customers.

“I don’t thank any were surprised,” he said.

On the day that Yellow acted, Consolidated Freightways of Menlo Park, Calif., imposed a fee pegged to the same cost level.

For the full story, see the July 19 print edition of Transport Topics. Subscribe today.