Fuel surcharges may lag diesel spikes
Shippers and brokers often index fuel surcharges on a one-month lag, so high diesel prices now could mean surcharges will rise further into April.
Fuel surcharges boost revenue for some waste management companies, offsetting rising fuel costs. This is because they can adjust surcharges to reflect fuel prices. A one-month lag in fuel surcharge indexing means that current high diesel prices may not be immediately reflected in surcharges. The lag could result in shippers and brokers undercollecting on fuel costs in the short term if prices continue to rise. Conversely, if fuel prices decline rapidly, the lag could temporarily benefit shippers and brokers as surcharges remain elevated. This creates a dynamic where both gains and losses are possible depending on fuel price volatility.
