Restaurants & Pumps Open. Restaurants’ New slogan: Eat here and get gas.

Shipping Fuel Surcharges

Eat here and get gas?  Tips & Fuel Surcharges are appreciated.

Acid Reflux or just plain gas? Who would have guessed? It’s just gas.

Now that we don’t have to wait in line for gas we can go out and grab a bite to eat and get gas – all at the same time – or can we ?  Gas-X relief anyone? Let’s look at some of the facts on how much we rely on one major pipeline.

The cyber attack on the Colonial Pipeline in Houston, Texas caused tremendous disruptions in the freight industry among others. We all got gas and indigestion simultaneously – from Houston to the South Eastern Coastline and up to New Jersey. 

If you remember the long gas lines in the 1970s and 80s then these recent lines at the pumps served as a a shocking reminder.  This is what can happen if we’re not careful and have our infrastructure 100% protected from intrusions and/or physical damage. We cannot just sit on the dock of the bay– watching the tide roll…

The other issue is to that we need an alternate pipeline. Some argue the Keystone Pipeline upon completion would have provided that option had it not been canceled. Remember the Suez Canal incident back in March? What a mess that caused. Can you imagine what would happen to prices if the Colonial Pipeline was delayed another week or more? Either way, a back up or alternative is a good idea as to not to rely so heavily on one such major pipeline.

Here are some facts – you decide if you want to eat here and get gas.

Fact:  Colonial has 260 delivery points in 13 states and Washington D.C.
Fact: Colonial delivers about 45% of the gas consumed on the East Coast.
Fact:  9,500+ gas station were out of fuel by that Wed (5/12/21)
Fact:  40% of gas stations were out of gas in NC
Fact:  50% of gas stations were out of gas in D.C.

Even though the pump$ are back in order, ju$t in time for thi$ Memorial Day weekend, this huge malware disruption is still causing issue$ in the freight industry. We are just beginning to see the effect$ of it, so hold on!  Yes, but wait – there’s more!  Colonial still cannot bill its customers after the “outage”.

Show me the money – please?

Colonial paid the hackers about a $4.4 Million ransom in cryptocurrency (75 BitCoin) in exchange for the decryption key needed to unscramble their data network. As a result, we got an increase (at the pumps) BUT we got gas.

Fuel availability affects all aspects of shipping.  Did you know that every item shipped has a fuel surcharge commonly known as an FSC.  The FSC changes depending on the actual price of fuel.  

One of the calculations is the fuel surcharge percentage using FedEx for example (excluding US Domestic Express Freight) and the charge per pound for US Domestic Express Freight services are subject to weekly adjustments published by the US Energy Administration (EIA), the US Gulf Coast (USGC) spot price for a gallon of kerosene type jet fuel.  Click to see the FedEx historical data and how prices increased this week. UPS and DHL follow this as well.

The other calculation is a fuel surcharge for Freight services.  It is based on the weekly published national US on highway average price for a gallon of diesel fuel.

So when there are lines at the pumps you can expect that the price for shipping your packages and pallets will go up.  This will affect your wallets (and purses) and will be based on the type of service you’re using.  For example the FedEx LTL Freight within the USA has a 25% surcharge effective May 12th based on a national average of $3.18 per gallon.   The April 14th rate was 24.7% using $3.12 per gallon.

AIR rates are different depending on whether you export or import.  So, either way, plan ahead and try to conserve your fuel by consolidating your trips.  Eat out and get gas is one recommendation. 

Stay well and be careful and alert as we approach the Memorial Day weekend. 

If you need help, then contact us and we’ll help you with the indigestion caused by shipping challenges. Safe travels next weekend !!!

By David Lorusso

CEO /DGL Logistics, LLC

[email protected]

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