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Fuel Levy AuditFairFuel ProgramSurcharge Audit

Logistics costs can be one of the largest areas of spend for many businesses, ranging from 1 per cent to 11 per cent of total sales depending on the industry. Within this large expenditure, fuel costs are typically the largest single component at 15 per cent to 40 per cent of overall logistics costs.

Many Australian shippers are wasting money because they do not actively manage their fuel costs — in part because fuel costs are considered as a pass-through cost and based on unmanageable diesel prices.
As with many spend areas, suppliers (the carriers, in this case) hold an informational advantage over buyers (the shippers), so most shippers tend not to challenge the pricing assumptions used to determine fuel charges.

FairFuel Program changed all of that. It enables shippers to leverage trip-level data to verify pricing assumptions, reduce fuel charges, and emissions in their supply chains.

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HOW DOES IT WORK?

Your diesel fuel levy, simplified

Analyse

We sort your fuel charges by carrier, lane and service – and tell you what’s right and what’s wrong.

Gain Visibility

Arm yourselves with data that is clean and accurate, so you can have fact-based dialogue within your team and strategic partners.

Simplify

We simplify your trip data and interpret contract clauses, making it easier to unlock cost savings.

Review Savings

You have the power to stop overpaying for fuel! The better informed you become, the better you equipped to make more insightful and valuable decisions.

Save

Plan to save up to 20% on your annual fuel spend with a targeted fuel program.

Take Control

Take back control of this large area of your transportation spend, drive efficiency and remove waste diesel from your supply chains.

INACCURATE FUEL LEVY ADDS UP TO MILLIONS OVER TIME

Explore our case studies

Relying on the default fuel surcharge formula and contract terms means you overpay for fuel. If you compensate your carrier when diesel cost increases, should you see a refund when diesel cost is record-low?

Victorian Chilled Freight 2019-2022

This food manufacturing company manages over 12,000 truck shipments each year, delivering dairy products to multiple locations in Victoria and interstate. FairFuel audit identified $398k savings in unfair fuel surcharges and discovered a simple contract clause cost this business over $200k per year.

$13.8m Freight Spend

$3.5m Fuel Cost

$398k Cost Savings

DOWNLOAD CASE STUDY (pdf 204kb)

DOWNLOAD CASE STUDY (pdf 251kb)

Construction Materials Haulage

Multi-carrier construction materials haulage operations with over 12,000 unique delivery locations in Victoria, New South Wales and Queensland and 6.4m kilometres travelled every year. Fair Fuel audit identified $222k of savings in reduced fuel charges.

$11.8m Freight Spend

$2.2m Fuel Cost

$222k Cost Savings

THE 3 DISTORTIONS OF FUEL SURCHARGES

1

Incorrect

Assumptions

Typical fuel surcharges calculated based on a few basic components: distance, a fixed litre-per-km assumption for the truck and a fuel cost weighting. Distance is fixed and unambiguous, but the other two assumptions should be examined.

It is common practice to use a single fuel cost weighting for short-haul and long-haul deliveries, which means shippers pay higher fuel levies for many years because of this incorrect assumption.

2

Inflated

Actual Cost

Price based on a national average Terminal Gate Price doesn’t reflect the actual cost of fuel to the carrier. It doesn’t reflect discounts negotiated with fuel suppliers and rebates such as Fuel Tax Credit.

All of this means that carrier may get as much as 15 percent margin on fuel costs.

3

Ambiguous

Agreement

When it comes to commercials, large carriers hold an informational advantage over shippers because most shippers don’t understand cost drivers of operating a truck.

A good example is industry-standard fuel levy formulas and application rules which were developed by carriers as a method for transferring risk.

UNCOVER YOUR SAVINGS.

Quick Contact

Interested in learning more about how implementing the FairFuel Program could improve your transportation strategy? Fill out the form and we’ll reach out to schedule a discussion.

Surcharges?