Investigation of Methodologies Used by Less-Than-Truckload (LTL) Motor Carriers to Determine Fuel Surcharges

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Date
2007-08-01
Authors
Grant, Keith
Kent, John
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Institute for Transportation
InTrans administers 14 centers and programs, and several other distinct research specialties, and a variety of technology transfer and professional education initiatives. More than 100 Iowa State University faculty and staff work at InTrans, and from 200 to 250 student assistants from several ISU departments conduct research while working closely with university faculty. InTrans began in 1983 as a technical assistance program for Iowa’s rural transportation agencies.
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Abstract

Fuel surcharge policies are utilized by transportation companies to transfer the expense associated with fuel prices to their customers. As fuel surcharges have become a significant portion of the expenses on transportation invoices, an increasing number of shippers are expressing more interest in these policies. The objective of this study is to discover how less-than-truckload (LTL) carriers develop and utilize fuel surcharge policies to recover their fuel expenses. Thirty-nine top LTL carriers were called on to explain their perspectives and methodologies with regard to fuel surcharge policies. Part-to-whole qualitative analysis was conducted to summarize responses from a standardized interview protocol. In addition, 25 published fuel surcharge policies were obtained and analyzed to explore the disparities among LTL fuel surcharge policies. Findings show that, while carriers were reluctant to discuss their fuel surcharge development, in practice there were two primary methodologies that left all carriers with very similar fuel surcharge policies.

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For more on this project and other project reports from InTrans, please visit http://www.intrans.iastate.edu

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