Fuel surcharges are additional expenses that are applied to the total cost of shipping. These surcharges account for the unpredictable nature of fuel costs and the extra expense required to deliver a shipment to its destination. How carriers calculate and apply the charges will vary, but fuel surcharges are often based on a national average as evaluated by an independent third party.
Changes in fuel surcharges rely on a number of factors, but they will most commonly fluctuate with the increase and decrease of fuel prices. Typically, when fuel prices increase so will a carrier’s fuel surcharge fees resulting in a higher total cost for postage. Carriers might also include a temporary fuel surcharge increase in the event that shipments must be rerouted amid natural disasters such as flooding or landslides.
How often do fuel surcharges change?
Carriers update their surcharges and fees at different intervals. As the cost of fuel can change quite dynamically some carriers update their fuel surcharges weekly, while others will change them monthly.
When carriers are making changes to their fuel surcharges, they will announce publicly the expected date for the fees to take effect and the rate at which they will increase or decrease. You can often find a carrier's current surcharge fees with calculations for both international and domestic shipments with a quick web search or posted on their website.
How do fuel surcharges affect Chit Chats postage?
Chit Chats postage is regularly subject to changes in fuel surcharges implemented by our partner carriers. However, given the resources that Canada Post, our partner carrier for Canadian shipments, requires to deliver shipments across the country, fluctuations can be much more significant than that of U.S. and international postage partners. This is largely due to Canada Post’s mandate to service all Canadian addresses, including areas with much lower population density. As a result, shipments sent with our Chit Chats Canada Tracked service are subject to monthly fuel surcharge changes from Canada Post.
Each new fuel surcharge rate from Canada Post is expected to go into effect on the first Monday of each month and we will do our best to inform you of significant changes with as much advance notice as possible. While these updates will not affect your shipping workflow, you may notice a difference in the cost of postage once a new fuel surcharge is applied.
Planning for Fuel Surcharges
Ecommerce sellers may find it difficult to account for these fluctuations as they often happen very rapidly. As the cost of shipping has a high impact on business, we recommend that you stay updated about carrier’s announcements of fuel surcharges by monitoring their news pages.
Once fuel surcharges are announced, you should consider making adjustments to your store’s shipping estimates and communicating these changes with your customers.