Guidance to NRC members:
As fuel price volatility continues to impact the transport sector, we are reminding members of the importance of using clear, consistent and accurate language when applying a Fuel Adjustment Factor (FAF) to pricing.
A Fuel Adjustment Factor is not a surcharge, and it should not be described or referenced as one in any customer communications, quotes or invoices. The term “surcharge” can imply an arbitrary or additional fee, which does not reflect the purpose of a FAF.
Instead, a FAF is a transparent pricing mechanism that enables transport operators to adjust for fluctuations in fuel costs over time. It is designed to ensure that changes in fuel prices, whether these are increases or decreases, are fairly reflected in the total cost of service.
Using a FAF benefits both operators and customers. Compared to “all-in-one” pricing, where fuel costs are embedded and less visible, a FAF provides clarity and transparency within the billing process. It allows customers to clearly see how fuel costs are calculated and how movements in fuel prices are impacting pricing over time.
To support this approach, we recommend that:
- All quotes and invoices clearly present the total price, inclusive of any fuel-related adjustments.
- The Fuel Adjustment Factor is explained transparently, including how it is calculated and how it responds to fuel price movements.
- The term “fuel surcharge” is not used in any customer-facing materials.
Maintaining consistency in how FAF is communicated will help build trust with customers, reduce confusion, and reinforce the industry’s commitment to fair and transparent pricing.
If you have any questions or would like further guidance on implementing or communicating FAF, please get in touch.
Guidance to Media
As fuel prices fluctuate, transport operators may apply a Fuel Adjustment Factor (FAF) to reflect changes in fuel costs. In a volatile fuel environment, a FAF helps ensure pricing remains fair, responsive and transparent for both transport operators and their customers.
A FAF is not a surcharge, and it is misleading to describe it as one. Rather than being an additional fee, it is a transparent pricing mechanism that adjusts the cost of transport services in line with movements in fuel prices, both up and down.
Compared to “all-in-one” pricing, where fuel costs are built into a single rate, a FAF provides greater clarity for customers. It allows them to see how fuel costs are calculated and how changes in fuel prices are directly impacting what they pay.
Invoices and quotes typically present the total price, including any fuel-related adjustments, ensuring customers have full visibility of the final cost.