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When it comes to shipping your vehicle across Canada or to the United States, understanding the various components of your shipping quote is crucial. One important element that often raises questions is the fuel surcharge. At Hansen's, with over 40 years of experience in the industry and a fleet of over 300 transport vehicles, we believe in transparency. That's why we're here to guide you through the ins and outs of fuel surcharges in vehicle shipping.
A fuel surcharge is an additional fee that shipping companies apply to cover the fluctuating fuel costs. In the vehicle shipping industry, fuel surcharges play a significant role in determining the final cost of transporting your car. This charge is separate from the base shipping rate and is designed to account for the volatile nature of fuel prices.
Fuel surcharges were originally created to legitimize contractual agreements between shippers and carriers for shipping materials. In most cases, these contracts were annual or long-term, allowing for stability in pricing while accounting for fuel price fluctuations.
Fuel surcharges serve several important purposes in the vehicle shipping industry:
• Cost stability: They help shipping companies maintain stable pricing despite fluctuating fuel costs.
• Transparency: Fuel surcharges provide clarity on how fuel prices impact shipping costs.
• Fair pricing: They ensure that customers only pay for actual fuel costs incurred during their specific shipment.
Fuel surcharges are applied to the shipping cost of vehicles at Hansen's to isolate the cost of fuel and ensure pricing reflects current market conditions. The surcharges are determined based on the method of transportation used: truck, rail, or barge.
Hansen's uses different methods to calculate fuel surcharges depending on the transportation mode:
• Rail shipments: Rates are published in tariff 9900 by Canadian Pacific Kansas City Railway.
• Truck and barge shipments: Rates are based on the average weekly cost of diesel and other energy sources, as published by the Freight Carriers Association of Canada and other related periodic publications.
It's important to note that these surcharges are updated monthly, and historical data shows that they can fluctuate significantly. For example, in January 2024, the rail surcharge was as high as 28.32, while in August 2024, it decreased to 22.4.
While fuel surcharges are a necessary part of vehicle shipping, there are ways to potentially minimize their impact:
• Flexible shipping dates: Choose to ship when fuel prices are lower.
• Compare quotes: Different companies may have varying fuel surcharge policies. At Hansen’s, we strive to offer competitive and transparent pricing.
Fuel surcharges are integral to vehicle shipping, reflecting the dynamic nature of fuel prices in the transportation industry. Understanding how fuel surcharges work enables you to make more informed decisions about your vehicle shipping needs. At Hansen’s, we're committed to providing clear, fair pricing and exceptional service for all your vehicle transport requirements. Our decades of experience in the industry have taught us the importance of clear communication about all aspects of vehicle shipping, including fuel surcharges.
Whether you're moving across Canada or to the United States, trust Hansen's to deliver your vehicle safely and efficiently, with full transparency on all costs, including fuel surcharges. Contact us today. Our team is always ready to answer your questions about fuel surcharges or any other aspect of vehicle shipping.
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