Carriers’ Surcharges Working But Concerns Loom, Journal Reports

argo carriers have so far used fuel surcharges to blunt high fuel prices, but that could shift if oil prices continue to rise, the Wall Street Journal reported Monday.

Truckers, railroads and other carriers’ surcharges typically trail fuel prices by several weeks, which can limit companies’ ability to collect surcharges, the paper reported.

The paper said FedEx Corp. was finding it hard to keep up with fuel price increases even though it has an 8.5% surcharge on air and 1.75% surcharge on its ground shipments.

But the paper said cargo carriers, including Yellow Roadway Corp., are faring better than passenger airlines when it comes to recouping fuel price increases from their customers.

Union Pacific, the largest U.S. freight railroad, does not always have fuel-surcharge provisions in some of its long-term coal contracts, the Journal reported.

And UPS Inc. has a 9.5% cap on air shipments which limits its ability to collect on additional fuel costs, the paper said.

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