The June, 2008 UPS Ground fuel surcharge is now 8.50%. It was 7.75% for May.
UPS states “The surcharge will be based on the National U.S. Average On Highway Diesel Fuel Prices reported by the U.S. Department of Energy for the month that is two months prior to the adjustment.”
Accordingly, the average On-Highway Diesel Fuel Chart shows the price per gallon for May was $4.425, resulting in a projected July surcharge for July of 9.5% – up a full percentage point from the current 8.5%. This equates to a probable fuel surcharge increase from April to July of nearly 24%.
Looking ahead to August, the average diesel fuel cost for June 2 was $4.70 forcing UPS to issue a new chart. The current chart stops at $4.62 with a comparable surcharge of 10%. Assuming the new chart maintains the same 8cent and half point jumps, then shippers can expect a surcharge of between 10.5% and 11.0% for August.
(Note: Federal Express Ground surcharges follow a similar pattern although the shipper has not yet posted a new chart but must do so soon as the chart ends at $4.14 per gallon.)
Does this impact your “Back To School” and “End of Season” promotion plans? The end of Free Shipping? Price increases for Q4? Let’s hear your thoughts.
35% fuel surcharges.
That is a haunting figure, but not out of the question. Businesses will continue to pass on the cost to their customers as we have already felt in our pocket books.
I can’t imagine companies like Amazon giving free shipping on orders over $25.00 much longer. In some indutries already the cost of shipping is more then the product itself.
Comment by Georgia Logistics Services — July 28, 2008 @ 4:18 pm |