A common challenge for many mid-size trucking companies that haul consumer goods is a heavy reliance on fuel to fulfill the company's freight delivery commitments and the unknown cost of the fuel to the customer. In the past, companies have added a fuel surcharge to shipping invoices to address the rising fuel prices.
Although fuel surcharges appear equitable on the surface, often the customer is unaware of the additional cost and the impact on already thin margins. In addition, companies need to rely on dedicated resources and tools to manage and implement the fuel surcharge program. There is an alternative approach to address challenges as well as to potentially create a competitive market advantage for your company and improve overall customer satisfaction. A financial hedge program can help protect cash flow and provide more certainty in financial outcomes.
Fuel price volatility has resulted in erratic surcharge rates in the past, which has led to confusion and frustration among customers forced to pay the rising cost of transporting freight. Customers often find that it is very difficult to manage an unpredictable cost structure, given the variability of fuel surcharges. Many AEGIS’ customers are leveraging financial hedging to better manage these variable costs.