Fuel Surcharge

Background

From 2011 to 2015 we applied a Fuel Surcharge to contracts where we (or our nominated hauliers) delivered or collected equipment. This was in response to the rising cost of fuel at the time. We agreed that we would suspend the charge as soon as the fuel price fell below 120ppl. As you can see from the chart below, the cost of fuel has been steadily trending upwards since the beginning of 2016, and has risen by more than a quarter in this time, to a point where the UK has the third highest diesel price in Europe. 

Despite mounting increases in diesel fuel prices, plus increases in associated travel costs we have absorbed these costs without passing these increases on to you. However, with many of our customers requiring equipment to be delivered and collected from site and as an operator of more than 1,600 goods vehicles, this is a cost which we simply cannot continue to absorb, as such, we are re-activating our Fuel Surcharge.

Overview of fuel surcharge

With effect from 1st August 2018 all final invoices raised after this date where we have delivered or collected equipment will be subject to a fuel surcharge of £1.90.  This is a charge in addition to the normal transport costs charged to customers.

How will the Fuel Surcharge Operate?

As opposed to applying a percentage surcharge, we will apply a fixed charge fuel surcharge of £1.90 to final invoices generated after 1st August 2018. You will only pay the fuel surcharge once per hire contract, regardless of hire contract length, and you will only pay it when equipment is off-hired at the end of the hire contract.

For example, if you hire equipment for 2 months the invoice at the end of month 1 will not show the fuel surcharge, but the invoice you receive at the end of month 2 will. This charge will be visible as ‘Fuel Surcharge’ on your invoice.

What if you collect and return the equipment yourself?

95% of our customers require equipment to be delivered to and collected from site in order that they can complete their projects.  However, the Fuel Surcharge will only be applied in instances where equipment is delivered to or collected from site by A-Plant or one of our nominated hauliers. If you collect and return equipment on the same hire contract from/to an A-Plant depot the Fuel Surcharge will not be applied.

Does the Fuel Surcharge apply to fuel supplied in equipment?

No. The Fuel Surcharge only applies to equipment deliveries and collections. All arrangements for fuel supplied in equipment remain unchanged.

How have we calculated the Fuel Surcharge?

Although we are introducing a standard ‘fixed cost’ fuel surcharge regardless of the size of the contract or the amount of equipment on hire, our fuel surcharge is linked to the UK monthly average diesel price published on The AA website. We will be as transparent as possible with regard to this issue.  We will continue to monitor fluctuations in fuel prices, hence this surcharge may be increased, decreased or eliminated in the future depending on the trends of the price of fuel and other transport related costs.  Any reductions in fuel prices within certain bandings will be passed directly on to you and should fuel costs return to more acceptable levels, we will eliminate the fuel surcharge altogether.

The table below details exactly how the bandings will operate:

Fuel Price From:

Fuel Price To:

Fuel Surcharge:

-

£1.199

Fuel Surcharge eliminated

£1.200

£1.499

£1.900

£1.500

£1.649

£3.800

£1.650

£1.799

£5.700

£1.800

£1.800+

TBC

What are we doing to combat the effects of rising fuel costs?

We are consistently specifying the latest engine and emissions technology in our delivery vehicles. We have invested in excess of £21 million over the last two years on upgrading our vehicle fleet with body designs and engines with the highest levels of fuel efficiency and emissions compliance.  What’s more, we are planning to invest an additional £18 million in new vehicles over the next 12 months.

If you have any queries or you’d like to get in touch, please click here.