More Surcharges on the Way as Diesel Average Nears $1.15

Con-Way Transportation Services, the nation’s fourth-largest less-than-truckload carrier, announced a new base for its fuel surcharge formula Aug. 2, as the national average price for diesel rose again, to $1.146 a gallon.

However, the week’s price hike of 0.9 cent a gallon, wasn’t quite enough to trigger Con-Way’s surcharge.

The national average price for diesel has now risen 13 cents from a year ago, and is the highest since Jan. 5, 1998 — 19.3 cents above the historic low posted on Feb. 22 of this year. The averages are calculated by the Department of Energy.

The new average is 0.4 cent short of the level at which some customers of Con-Way would start seeing a surcharge on their freight bills.

Con-Way had been using regional reports for measuring price levels and calculating surcharges for its subsidiaries — Con-Way Western Express, Con-Way Central Express and Con-Way Southern Express. The carriers have linked their operating territories over the past two years to accommodate shipments between regions.

Bryan Millican, executive vice president of Con-Way, said customers who experienced surcharges during the higher fuel prices of 1997 “asked us to simplify their rate audit and payment procedures by using a single method of applying the fuel surcharge.”

From now on, Millican said, Con-Way of Palo Alto, Calif., will use DOE’s national average price as the base in calculating surcharges for its three LTL carriers.

For the full story, see the August 9 print edition of Transport Topics. Subscribe today.