Know The Difference Minute

Higher diesel prices increase the cost to move goods, but it’s the customer who winds up paying through fuel surcharges.

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The high cost of shipping.
Welcome to the Know the Difference Minute.
Diesel fuel crossed $4 a gallon this weekend and we’re all going to feel it—even if you’re in a Tesla.
From UPS to FedEx, the roads are jammed with delivery trucks, most running diesel. Same with nearly all of the long-haul big rigs. Higher diesel prices increase the cost to move goods, but it’s the customer who winds up paying through fuel surcharges.
Fuel surcharges have been around since the Arab Oil Embargo and are in place to protect shipping companies from price swings that hammer profitability. UPS will raise theirs to 13% when diesel hits $4.10 a gallon. FedEx changes both their ground and air surcharges weekly. It's a complex formula.
Carriers enjoyed widespread profits in 2020 but the situation reversed last year. The ongoing conflict in Ukraine isn’t going to help.
I’m Dave Spano from Annex Wealth Management. That is your Know the Difference Minute.