For most companies, freight costs have increased dramatically. These rising and unpredictable costs occur as either real expenditures in fuel costs or are billed from third party freight providers as fuel surcharge.
Nearly all freight invoices from third party carriers have an added fuel surcharge cost. These expenses are up significantly over the level of freight cost in past years. This can easily make shipping expenditures go well over budget, and can have dramatic effects on overall margins and profitability.
Our clients find that this frustrating experience is made more complex by the fact that various carrier types — truck, rail, barge, inter-modal, and many others — apply different formulas to create their fuel surcharges. The typical shipper usually has multiple carriers within a category. This creates a very complex issue when one tries to manage a shipping budget. Regardless of the business you are in, if you have cost associated with shipping, the surcharge can easily be the difference between your organizations profit and loss.
Whether your situation is simple or complex, the FCM Division of INTL FCStone Financial Inc. will custom design solutions to help you quantify and cap the fuel surcharge component of your shipping expense. This helps make it possible for your organization to stabilize that portion of the variable expense budget. Let us assist you -in identifying hedge strategies which are best suited to your specific needs.
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