A fuel surcharge is an extra fee charged by trucking companies (or third parties) to cover the fluctuating cost of fuel. In the example below, we will apply fuel charges based on the mileage between destination A and destination B.
Let’s walk through the setups. In the picture below you can see the common workflow for the process:
The fuel index region allows you to determine the variety of fuel prices by each region individually and set out where freight will be delivered.
To set up fuel index regions, follow these steps:
Fuel indexes are set by the Department of Energy (DOE) for the various regions of the United States. You are able to create explicit list of regions as follows:
East Coast |
New England |
Central Atlantic |
Lower Atlantic |
Midwest |
Gulf Coast |
Rocky Mountain |
West Coast |
West Coast less California |
For our particular case, we are assuming that the prices vary by 4 regions: East, West, North, and South.
Fuel indexes which are associated to fuel index region determine fuel prices based on different date ranges. To reflect the change in fuel prices over time, you can associate a region with multiple fuel indexes.
To create a fuel index, follow these steps:
In the carrier fuel index, you specify the per-gallon fuel charge limits for the carrier.
To create a carrier fuel index, chose the appropriate option:
Option #1
Option#2
Field | Description |
PPG From, PPG To | Enter the price range for the price per gallon. A fuel price in this range is added to the freight charges. |
Percentage | Enter the percentage of the freight surcharge that is added to the rate. This is a percentage of the accessorial unit that is specified in the carrier’s accessorial assignment. |
Rate | Enter a flat rate to cover the freight surcharge. This rate is added to the rate that is calculated for the carrier. |
Currency | Enter the currency of the index. |
Define the association of prices for fuel charges with the carrier and fuel index regions. You can create the following data (using Percentage):
You can create the following data (using Rate):
Let’s take a look at the first case.
To calculate fuel surcharges for a shipping carrier, you must specify a fuel index region together with the carrier’s accessorial assignment.
To associate a shipping carrier with a fuel index region, follow these steps:
Make sure that the charge applies to the selected region and is calculated based on mileage.
You can categorize accessorial charges to guarantee that a particular type of charge, such as a fuel surcharge, is applied only once. These charge categories are called accessorial masters. To create accessorial master, follow these steps:
You must set up an accessorial master before you can set up a carrier accessorial.
When actual freight bill and freight invoice are recorded, we will be able to identify different charges by using billing groups. Because a fuel charge is considered a very specific, standard type of charge, we should make sure that we have a specific billing group for it.
Create specific billing group for fuel charges. To create billing group, follow these steps:
Carrier accessorial charges allow you associate a particular type of charge with the carrier and billing group. You have ability to specify the external code of the charge, which is the code that appears on the transportation vendor invoice line.
To create carrier accessorial charges, follow these steps:
Make sure that the rating profile that is associated with the shipping carrier uses the correct carrier fuel index.
The rate master contains several rate base assignment records. These are used to select a subset of rating data, based on specific criteria, such as the pickup address.
Test the current setup – the FUEL charge should appear next to the base freight charge.
You should see two records: GFE corresponds to the freight charge that is specific to Washington state, and FUEL is the new surcharge, which is the product of the mileage and the rate per mile at the current fuel prices in the east region.
Let’s go through unit rates for both records in detail.
I hope you found this tutorial beneficial!
Galyna is a Microsoft Certified Dynamics Professional with 5+ years of full lifecycle Dynamics AX implementations experience (Analysis – Deployment). Galyna has experience working with Dynamics AX from Axapta 4.0 to AX 2012. She was involved from A to Z during the AX implementation project for a large industrial company as ERP Consultant and has been efficient with testing Dynamics AX solutions.