What Is a Fuel Levy — And Why You Need One in Your TMS

Fuel prices can be unpredictable, swinging from month to month and even week to week. As freight and logistics operators, the way you manage these changes can have a significant impact on your bottom line. 

When you’re managing subcontractors, running your own fleet, and servicing multiple customers, it’s important to automatically capture fuel use and apply the right charges — all within one system. That’s where fuel levies come in.

A fuel levy lets you flex your pricing in line with real fuel costs — so you’re not left covering unexpected increases or renegotiating contracts every time prices shift. With CartonCloud’s Transportation Management System (TMS), you can customize fuel levies at the customer level within each rate card, giving you the flexibility and control to manage fuel fluctuations with ease.

If you're wondering what is a fuel levy and how it fits into your pricing model, the short answer is — a fuel levy gives you a smarter, more flexible way to keep up with market shifts.

TL;DR: By applying a fuel levy in your operations, you can adjust rates fairly, while protecting your margins and keeping pricing transparent for your customers. In this blog, we'll walk through how you can use CartonCloud’s fuel levy calculator to easily keep up with the market and never miss a charge.

Q: What is a fuel levy?

A: A fuel levy is a variable surcharge added to your transport or delivery charges, designed to reflect fluctuations in fuel prices over time. Instead of relying solely on fixed-rate contracts, a fuel levy gives you the ability to adjust pricing in response to actual fuel market conditions — helping you recover costs fairly and consistently.

Q: Why should you use a fuel levy calculator?

A: Managing fuel levies manually might work when you have one or two customers — but as your business grows, it becomes time-consuming, inconsistent, and prone to revenue leakage.

How does a fuel levy work in CartonCloud’s TMS? 

A fuel levy calculator automates your fuel surcharge calculations across all of your customers and services. It applies the right percentage based on your configured rules, whether that’s a base rate, customer-specific adjustment, or one linked to a fuel index.

With CartonCloud, the fuel levy calculator is built directly into your TMS. 

That means every time a job is created or an invoice is generated, the correct fuel levy is automatically applied — so you never miss a charge, and your customers always get a clear, itemized breakdown.

Using a fuel levy calculator also makes your entire pricing process more accurate, efficient, and transparent. Here’s how it can benefit your transport business:

• No more forgotten surcharges — every charge is automatically accounted for.
• Clear visibility of fuel-related revenue — helping you track and report with confidence.
• Transparent billing for your customers — improving trust and reducing pricing disputes.
• Easy rate adjustments — update fuel levies without rewriting every contract.

Q: How do you calculate fuel levy charges?

A: Fuel levy charges are typically calculated as a percentage of your base transport rate. For example, if you have a delivery rate of $100 and apply an 8% fuel levy, the total becomes $108.

This percentage can be fixed or flexible — depending on how you want to apply it. You may want to use a flat fuel levy across all of your customers, or tailor your rate based on region, fuel index, or customer. 

Here’s how to calculate fuel charges using CartonCloud’s fuel levy calculator. As fuel prices shift, you can easily make updates without digging through spreadsheets or manually adjusting each of your customer’s rates. That means you can: 

• Set a default fuel levy to apply across all transport services.
• Tailor levies for individual customers based on unique contracts or service needs.
• Add percentage modifiers (like “+2%” on top of your base rate) for extra flexibility.
• Keep all charges organized within rate cards, so everything runs smoothly — with no extra admin needed.

Q: How can a fuel levy support pricing transparency for my customers?

A: One of the major benefits of using a fuel levy is the clarity it brings to your pricing. By separating the fuel component from your base transport charges, you’re showing customers exactly what they’re paying for — and why.

This approach makes it easier to communicate rate changes tied to real market conditions, rather than simply increasing prices without context. When customers can see that the fuel levy moves in line with actual fuel trends, it builds trust and supports long-term relationships.

And when it’s time to invoice, CartonCloud takes care of the details — automatically applying the fuel levy as a separate line item, so your charges are clear, transparent, and easy for customers to understand.

Common Fuel Charge Scenarios for Transport Businesses

No two customers are exactly the same — and when it comes to fuel charges, each one may have different needs based on their services, contracts, or delivery types. That’s why it’s important to have a system that allows you to manage complex pricing structures without the complexity.

Let’s walk through a simple example of how to calculate fuel charges using CartonCloud’s fuel levy calculator.

Say you’ve set a base fuel levy of 10% across your business, however:

• Customer A is on an older agreement that includes a flat 8% levy.
• Customer B needs “base +2%” due to long-haul service requirements.
• Customer C is exempt from fuel levies altogether.

For this example, you can use CartonCloud to configure your fuel levy to be flexible in just 3 simple steps, so you can charge your customers with accuracy.

1. Set a base fuel levy at the account level that applies across all transport charges.
2. Apply customer-specific adjustments using Rate Card offsets (e.g. +2% or -2%).
3. Fine-tune even further at the Transport Rate level — setting fixed rates or additional offsets for specific services or routes.

This layered approach means you can reflect unique customer agreements, route demands, or operational costs — all while keeping everything centralized and automated. Just activate the fuel levy on the relevant charge and CartonCloud will handle the rest.

Once configured, your fuel levies will be:

• Applied automatically to the correct jobs.
• Clearly shown as a line item on invoices.
• Fully trackable in your reports.

Customizing Fuel Levies for Local Conditions

Accurately tracking and applying fuel charges at a local level is essential for staying competitive and protecting your margins — especially when fuel costs vary by region, distance, and service type.

CartonCloud’s fuel levy calculator Australia feature is built to support the real-world needs of local freight operators. Whether you're updating levies monthly, quarterly, or based on your own internal fuel tracking, the system gives you flexible tools to manage your charges with confidence.

You can:

• Match fuel levies to local benchmarks or pricing indexes.
• Schedule start and end dates for rate changes to align with seasonal shifts.
• View historical levy updates to support transparent customer communication.
• Apply consistent rules across your business, or customise by customer, region, or service.

Once your rate structure is in place, CartonCloud does the heavy lifting — automatically applying the correct levy from consignment to invoice, with no manual input required.

So no matter if you’re managing metro courier jobs, regional deliveries, or long-haul freight across multiple states, CartonCloud’s fuel levy calculator gives you the tools to stay accurate, agile, and in step with the market.

Key Takeaways

• Fuel levies help you stay profitable by adjusting charges to reflect real fuel costs, without needing to renegotiate contracts each time prices rise.
• CartonCloud’s fuel levy calculator automates it all, saving you time and reducing the risk of missed or incorrect charges.
• Transparent invoicing builds trust with your customer, with clear, itemized fuel charges that reflect actual market conditions.

Find out more

Want to see how CartonCloud’s fuel levy calculator works in action? Book a free demo today and discover how easy it is to automate, customize, and take control of your transportation fuel charges.