The fuel surcharge mechanism implies that the costs of diesel will be determined through the calculation of the monthly average of the officially published fuel price by the European Commission (Oil Bulletin).
Reference Fuel Price (R): € 1.12 / 1 L
Reference Price Calculation: Weighted average EU Diesel Prices excl. VAT of 2021
Fuel Share (F): 25%
Average Monthly Fuel Price (A) = 2 Month Lag, excl. VAT
Fuel Surcharge % = [(A-R)/R] x F
A = Average Monthly Fuel Price (latest reported)
R = Reference Fuel Price
F = Fuel Share%
(*) Please note: Although every effort has been made to provide complete and accurate information, sennder makes no warranties, express or implied, or representations as to the accuracy of content on this website. sennder assumes no liability or responsibility for any error or omissions in the information contained in the website or the operation of the website.
In March, Fuel Surcharge% calculation, the average diesel price of January is used (2 month lag). January's average EU diesel (€ 1.26 / 1 L) price was +13% higher versus the reference price (€ 1.12 / 1 L). After applying a 25% fuel share, the fuel surcharge% for the month of March is set at 3.1%.
The EU bulletin index is the only free, publicly available index that covers all EU countries on a weekly basis - sennder wants to have a consistent, open, transparent source of data.
The price of transport will be reviewed accordingly with the variation of the fuel price between the time of contracting and when the transport is actually carried out. As an example, if a price is agreed upon in January but only operated in March, the FSC mechanism will apply to calculate the change in price from January to March.
The EU bulletin is published each week a few days after its week ending date. Considering this reporting delay, it is not possible to use the most recent month, as the late update could lead to operational challenges.
Whilst VAT rate changes are made relatively infrequently, changes such as those seen in Poland during Q1 2022 (from 23% to 8%) have a huge impact on the “incl. VAT” rates paid by consumers, but carriers, not ultimately paying fuel VAT or able to offset, are not directly impacted. Changes to fuel excise duty do directly impact carriers.
Using the EU bulletin, “2005 onwards” file, we deduct the relevant VAT (sheet “VAT”; Note: weekly VAT figures not listed, but can be calculated on a VAT rate valid from:to calculation) from each country (sheet “Prices with taxes, per CTR”; Note: weekly prices inc VAT and fuel duty per country, looking at ‘Gas oil automobile Automotive gas oil Dieselkraftstoff’ as the Diesel Price in Euros per 1000L) and calculate the weighted average using the 2020 diesel consumption figures by country.
This produces an identical result to taking the calculated ex VAT rates and weighting them according to this ratio. This is the standardized EU weighting approach used to calculate the “EU incl VAT” rates with no assumptions from sennder.
Worked example for a specific country:
Please note: Fuel Surcharge Mechanism is only applicable for long term agreed transportation rates (Frame Agreements & Auto-Assignment) between sennder and carriers. Please contact your carrier managers, if you wish to apply the FSC to your long term agreed transport rate.
Our partners are directly affected by fuel fluctuations. Effective 01-Apr-2022, for carriers with pre-agreed freights, we have designed a Fuel Surcharge Mechanism (FSC) to compensate for fuel price movements on a pre-agreed transport rate.
The FSC mechanism implies that the costs of diesel will be determined through the calculation of the weekly/monthly average of the officially published fuel price by the European Commission (Oil Bulletin).
FSC adjustments are made weekly/monthly and based on the transport origin country and will have a respective 1 week/month lag in application of new prices.
(**) Please note: Although every effort has been made to provide complete and accurate information, sennder makes no warranties, express or implied, or representations as to the accuracy of content on this website. sennder assumes no liability or responsibility for any error or omissions in the information contained in the website or the operation of the website.
The FSC is linked to the average European country's diesel prices including levies but exclusive of VAT. Oil Bulletin issued by the Directorate-General for Energy and Transport of the European Commission.
Using the sennder wide assumption that average fuel share cost of transport was 25% during 2021, we calculate the week-on-week changes in fuel prices and a new transport rate, according to the origin country fuel indices from the EU. The calculator is based on an industry-approved floater model.
For a lane that has an agreed rate of €800, an average fuel price of €1.12/litre at the time of the agreement and an effective fuel share of 25%, weekly changes in transport rate can be seen below.