If you have had a freight quote in New Zealand, you have probably seen a line called FAF, fuel adjustment factor or fuel surcharge. It is one of the most common questions we get about a quote, so here is what it is, why carriers use it, and how it works on a Secure Transport quote.
What Does FAF Mean?
FAF stands for fuel adjustment factor. It is a fuel surcharge: a percentage added to the freight charge to cover the difference between the diesel price a carrier's rates were built on and what diesel actually costs today.
It is not a hidden fee. It exists because fuel is one of the biggest costs of running a truck, and it is the one cost that changes from week to week.
Why Carriers Use a Fuel Surcharge
A carrier could build today's diesel price straight into its rates, but then every rate would need to be rewritten each time the pump price moved. Instead, the base rates assume a set diesel price, and the FAF goes up or down as diesel changes.
That keeps base rates steady for customers who send freight regularly, and it means you pay closer to the real cost of fuel at the time - less when diesel falls, more when it rises.
How a Fuel Surcharge Is Worked Out
Every carrier sets its own FAF. In general it comes from comparing the current diesel price with the price the base rates assume, and how much of the freight rate is made up of fuel. Because it is built on each carrier's own costs and its own base rates, one carrier's FAF percentage cannot be compared directly with another's.
How FAF Works on a Secure Transport Quote
Shown as Its Own Line
Your quote shows the freight charge, the fuel surcharge and GST separately, so you can see what each part of the total is for.
A Percentage of the Freight Charge
Under our terms of trade, the fuel adjustment factor is a percentage of the freight charge and applies to all carriage - large jobs and single items alike.
Reviewed as Diesel Moves
We review our FAF as diesel prices change, rather than rewriting every rate each time the price at the pump moves.
Is FAF the Same as Road User Charges?
No. Road user charges (RUC) are a government charge per kilometre that every diesel vehicle pays for using the roads. They are part of a carrier's normal running costs and are already built into its rates. FAF only deals with the changing price of the diesel itself.
Comparing Freight Quotes That Include a Fuel Surcharge
When you compare carriers, compare the total. A low base rate with a high surcharge can cost more than a higher base rate with a lower one. Check that each quote includes:
The Fuel Surcharge
Some quotes show a base rate only, with FAF added later on the invoice.
GST
Make sure you are comparing prices that are either all including GST or all excluding it.
Delivery Extras
Residential, rural and tail lift charges can make a real difference to the final price.
Our guide to what affects the price of a freight quote covers the other parts of a quote, and how to choose a freight company in NZ has more questions worth asking.
Questions about the fuel surcharge on a quote? Call us on 09 444 1243, or request a quote and we will show you the full breakdown.
← Back to all articles