Fuel Surcharge Mechanism

For Our Shippers

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%

Check the latest surcharges*:

Index
Reporting Month
Average of Month (2-Month Lag)
Diesel Price (excl. VAT, Weighted Avg EU27)
Reference Price
Δ %
Fuel Share %
Fuel Surcharge
EU
Sep 1, 2022
Jul 1, 2022
€1.63
€1.12
45.2%
25%
11.3%
EU
Aug 1, 2022
Jun 1, 2022
€1.66
€1.12
48.4%
25%
12.1%
EU
Jul 1, 2022
May 1, 2022
€1.57
€1.12
39.9%
25%
10.0%
EU
Jun 1, 2022
Apr 1, 2022
€1.55
€1.12
38.6%
25%
9.6%
EU
May 1, 2022
Mar 1, 2022
€1.61
€1.12
44.0%
25%
11.0%
EU
Apr 1, 2022
Feb 1, 2022
€1.33
€1.12
18.8%
25%
4.7%
EU
Mar 1, 2022
Jan 1, 2022
€1.26
€1.12
12.8%
25%
3.2%
EU
Feb 1, 2022
Dec 1, 2021
€1.22
€1.12
8.9%
25%
2.2%
EU
Jan 1, 2022
Nov 1, 2021
€1.24
€1.12
11.1%
25%
2.8%
EU
Dec 1, 2021
Oct 1, 2021
€1.22
€1.12
8.7%
25%
2.2%
EU
Nov 1, 2021
Sep 1, 2021
€1.15
€1.12
2.3%
25%
0.0%
EU
Oct 1, 2021
Aug 1, 2021
€1.13
€1.12
1.0%
25%
0.0%
EU
Sep 1, 2021
Jul 1, 2021
€1.13
€1.12
0.9%
25%
0.0%
EU
Aug 1, 2021
Jun 1, 2021
€1.11
€1.12
-1.1%
25%
0.0%
EU
Jul 1, 2021
May 1, 2021
€1.08
€1.12
-3.2%
25%
0.0%
EU
Jun 1, 2021
Apr 1, 2021
€1.07
€1.12
-4.5%
25%
-1.1%

(*) 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 rules of the adjustment on the tendered price will apply based on the following points:

  1. Given potential VAT adjustments across EU countries, all fuel prices are excluding VAT.
  2. The fuel price will be reviewed on a monthly basis. Therefore, the freight price may be adjusted every month. 
  3. Fuel prices used to determine Fuel surcharge% are based on a 2 month moving lag (e.g. in March, average Fuel Price of January will be used). All weeks ending within the reported month are taken into consideration.
  4. For every at least 4% difference in fuel price to the reference price, the freight price will be adjusted by 1%. If the fuel price changes less than 4%, then no changes in the freight price will be applied. 
  5. Application may result in an  increase or decrease of fuel and freight price. 

Workable example:

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%.

Frequently Asked Questions

Why does sennder use the EU index?

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.

What happens when we agree on a price of transport at a certain date but the transport is only operated several months later?

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.

Why do you use 2 month lag?

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.

Why do you exclude VAT?

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.

How do you exclude VAT?

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:

  1. Austria (AT) diesel price for week ending 07/03/22 was €1719
  2. VAT rate on Diesel in Austria has been 20% since 01/01/95 (“date of entry into force”)
  3. Ex VAT rate = Inc VAT rate / (1+VAT rate) → €1719/(1+20%)=€1432.50
  4. Calculation example

For Our Fleet Partners

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.

Check the latest surcharges**:

Week Starting
Lane Origin Country
Diesel Price
WoW %
WoW Adj % on Freight Rate
Aug 1, 2022
AT
€1.67
-1.3%
-0.5%
Aug 1, 2022
BE
€1.65
-1.3%
-0.4%
Aug 1, 2022
BG
€1.47
-0.9%
-0.3%
Aug 1, 2022
CY
€1.64
-0.8%
-0.3%
Aug 1, 2022
CZ
€1.57
-1.6%
-0.5%
Aug 1, 2022
DE
€1.63
-1.9%
-0.6%
Aug 1, 2022
DK
€1.65
-2.6%
-0.8%
Aug 1, 2022
EE
€1.40
-13.4%
-4.6%
Aug 1, 2022
ES
€1.60
-2.0%
-0.7%
Aug 1, 2022
FI
€1.79
-1.3%
-0.4%
Aug 1, 2022
FR
€1.61
-1.8%
-0.6%
Aug 1, 2022
GR
€1.56
-2.4%
-0.8%
Aug 1, 2022
HR
€1.54
1.2%
0.4%
Aug 1, 2022
HU
€1.15
2.4%
0.7%
Aug 1, 2022
IE
€1.63
-2.5%
-0.8%
Aug 1, 2022
IT
€1.55
-2.4%
-0.7%
Aug 1, 2022
LT
€1.54
-1.8%
-0.6%
Aug 1, 2022
LU
€1.49
-4.3%
-1.4%
Aug 1, 2022
LV
€1.57
-2.2%
-0.7%
Aug 1, 2022
MT
€1.03
0.0%
0.0%
Aug 1, 2022
NL
€1.65
-2.7%
-0.9%
Aug 1, 2022
PL
€1.49
1.0%
0.3%
Aug 1, 2022
PT
€1.51
-5.0%
-1.6%
Aug 1, 2022
RO
€1.57
0.1%
0.0%
Aug 1, 2022
SE
€1.89
-3.1%
-1.0%
Aug 1, 2022
SI
€1.47
-2.6%
-0.8%
Aug 1, 2022
SK
€1.55
-1.8%
-0.6%

(**) 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.

Methodology:

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.

Example:

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.

Week 1
€1.12
+12,5%
0%
Fuel Price change WoW
Fuel Price/litre
€1.26
Index
Week 2
Week 3
€1.87
+48%
Week 4
€1.19
-36%
Effective Fuel Share
25%
27%
36%
26%
Adjustments on Freight Rate
0.0%
+3.1%
+13.2%
-13%
Transport Rate (Frame Agreement)
€800
€825
€934
€813