Fuel Surcharge
General
A fuel surcharge is an additional fee added to the cost of transportation services to cover the increased cost of fuel. This fee helps businesses, especially those in transportation and logistics, manage the volatility of fuel prices.
The Transport Management app supports the following business scenarios related to fuel surcharges:
- Registration of fuel surcharge index
- Application of fuel surcharge index when recording transport costs
- Reevaluation of transport costs when the applicable index is known
- Invoicing of fuel surcharge
How is the fuel surcharge calculated?
The fuel surcharge depends on the applicable fuel surcharge index at the date of the supporting landed cost. When creating a new transport landed cost line for a transport order, record the known index as the Fuel Surcharge Index (%). This index is applied to the Amount (1) field to calculate the Amount with Fuel Surcharge (3).
The formula for calculating the fuel surcharge amount is as follows:
- Amount: The transport price manually inserted or calculated using the Transport Tariff.
- Fuel Surcharge Index: The known index for the selected vendor at the date of the Landed Cost.
- Fuel Surcharge Source Index: The known index for the selected vendor at the date of the Landed Cost. When the price is defined manually, the value is 0. If the price is defined using the Transport Tariff, then the index is the one defined on the transport tariff.
Note: Each time the Source Fuel Surcharge Index (%), Fuel Surcharge Index (%), or Amount fields are updated, the Amount with Fuel Surcharge is automatically recalculated.
Setup Fuel Surcharge Index
You can define the Fuel Surcharge Index on either the Vendor card or the Transport Tariff card.
Note: If no fuel surcharge index is defined on either the Vendor card or Transport Tariff, the applicable fuel surcharge index is assumed to be 0.
Determining the Most Applicable Fuel Surcharge Index (%)
To determine the most applicable Fuel Surcharge Index (%) for a vendor, follow these steps:
- Retrieve all recorded Fuel Surcharge Indices associated with the Vendor.
- Compare the landed cost date with the start dates of the indices.
- The applicable Fuel Surcharge Index (%) is the one with the most recent start date that is still on or before the landed cost date.
Note: Each time the Date or Landed Cost Vendor No. fields are updated in the Landed Cost table, the Fuel Surcharge Index (%) is automatically recalculated.
Landed Costs Assignment
The fuel surcharge calculation is also reflected in the landed cost assignments.
Fuel Surcharge Reevaluation
The Fuel Surcharge Index may be known with a delay. In such cases, you may want to record a preliminary value (the last known index when creating the landed cost) and reevaluate the Fuel Surcharge Amount when the actual index is known.
To reevaluate:
-
Use the “Update Open Landed Costs” action on the Fuel Surcharge page to update surcharge calculations.
-
Apply filters such as Vendor, Item Charge, and Currency.
The system recalculates applicable surcharges and adjusts Landed Costs and related assignments, as well as Open (not invoiced or partially invoiced) Posted Landed Costs and related assignments, to reflect a more updated amount if the Fuel Surcharge Index (%) has changed since the entries were posted.
Generating Purchase Invoice Lines
From the Purchase Invoice page
- Create Landed Costs Lines on the Purchase Order.
- Select “Get Fuel Surcharge Lines” to create Purchase Invoice Line(s) for the Total Fuel Surcharge Amount of the existing lines related to Landed Costs, by Item Charge No.
The system calculates and assigns the surcharge based on Landed Cost data.
From the Landed Costs page
-
Select “Create Invoice Lines with Fuel Surcharge”.
-
Creates Invoice Lines related to the applied assignments and Invoice Line(s) for the Fuel Surcharge Amount of the lines related to Landed Costs, by Item Charge No.
Accrual Reports
Landed Cost Accruals report is extended to support Fuel Surcharge calculation.
-
In the Landed Costs Accruals report, enable the option to include Fuel Surcharge amounts.
-
The report recalculates open amounts using surcharge values and updates the layout accordingly.