Fuel costs are one of the most important components of freight rates, alongside vehicle and personnel costs. Freight forwarders and transport companies closely monitor price developments. When diesel prices rise, they usually adjust freight rates quickly.

For freight buyers, monitoring diesel prices is equally essential. It helps them understand price adjustments made by service providers. It also enables them to react when prices fall.

What impact do diesel price fluctuations have on transport rates?

The share of fuel costs in freight rates varies depending on the shipment size. For groupage shipments, the share is significantly lower than for full truckload shipments.

Fuel costs account for around 12% of the freight rate for groupage shipments. For full truckload shipments, the share can reach around 25%, depending on the rate per kilometer.

If diesel prices increase by 5%, freight rates typically rise by about 0.6% for groupage shipments and about 1.6% for full truckload shipments.

How should diesel price fluctuations be managed?

Price fluctuations can be regulated in advance through a contractual agreement. This avoids unnecessary discussions with service providers. In road freight transport, such an agreement is commonly referred to as a diesel floater.

Transport service providers usually develop their own diesel floater models. However, shippers can also define their own floater rules. The key requirement is transparency. The floater must be easy to apply and integrate into freight rate calculations.

The appropriate diesel floater model depends on the company’s shipment structure. If most shipments are groupage, a model with smaller surcharges and discounts is appropriate. In full truckload transport, surcharges or discounts will be higher for the same diesel price fluctuation.

In principle, a separate floater could be agreed for each service provider or shipment type. However, this increases administrative effort. In practice, many companies therefore use a single diesel floater. It is usually based on the main share of transport volume and agreed uniformly with all service providers.

Conclusion

When designed correctly, a diesel floater agreement is a useful tool. It helps shippers and transport service providers manage fuel price changes in a fair, transparent, and partnership-based way. This is particularly valuable in business relationships designed for the medium to long term.

Practical tips for creating your own diesel floater, including a free template for download, can be found in the article: “Diesel Floater – Tips and Template.”