NZ Flexible Fuel Factor

The current fuel factor % for domestic services is:

Click here to view previous month's data
July 2017 3.80%
June 2017 4.00%
May 2017 4.00%
April 2017 4.30%
March 2017 4.20%
February 2017 3.50%
January 2017 2.80%
December 2016 3.20%
November 2016 2.50%
October 2016 2.10%
September 2016 2.10%
August 2016 2.90%
July 2016 2.40%
June 2016 1.50%
May 2016 1.30%
April 2016 0.20%
March 2016 0.20%
February 2016 1.60%
January 2016 2.60%
December 2015 2.70%
November 2015 3.00%
October 2015 2.80%
September 2015 3.50%
August 2015 3.80%
July 2015 3.70%
June 2015 2.80%
May 2015 2.70%
April 2015 2.20%
March 2015 1.60%
February 2015 3.30%
January 2015 4.70%
December 2014 5.30%
November 2014 5.50%
October 2014 5.40%
September 2014 5.40%
August 2014 5.70%
July 2014 5.50%
June 2014 5.30%
May 2014 5.40%
April 2014 5.50%
March 2014 5.80%
February 2014 6.10%
January 2014 5.50%
December 2013 5.50%
November 2013 6.00%
14-31 October 2013 5.80%
1-13 October 2013 3.00%
September 2013 3.10%
August 2013 2.60%
July 2013 2.10%
June 2013 2.35%
May 2013 3.00%
April 2013 2.90%
March 2013 3.00%
February 2013 2.90%
January 2013 2.90%
December 2012 3.20%
November 2012 3.40%
October 2012 3.10%
September 2012 2.20%
August 2012 2.50%
July 2012 3.30%
June 2012 3.40%
May 2012 3.30%
April 2012 2.80%
March 2012 3.50%
February 2012 3.60%
January 2012 2.90%
December 2011 2.40%
November 2011 2.30%
October 2011 2.10%
September 2011 2.40%
August 2011 2.60%
July 2011 3.50%
June 2011 4.30%
May 2011 3.50%
April 2011 1.70%
March 2011 1.20%
February 2011 0.80%
January 2011 0.19%
December 2010 0.00%
November 2010 0.00%
October 2010 0.00%
September 2010 0.00%
August 2010 0.00%
July 2010 0.00%
June 2010 0.00%
May 2010 0.00%
April 2010 0.00%
March 2010 0.00%
February 2010 0.00%
January 2010 0.00%
December 2009 0.00%
November 2009 0.00%
October 2009 0.00%
September 2009 0.00%
August 2009 0.00%
July 2009 0.00%
June 2009 0.00%
May 2009 0.00%
April 2009 0.00%
March 2009 0.00%
February 2009 0.00%
January 2009 0.00%
December 2008 0.00%
November 2008 0.68%
October 2008 2.00%
September 2008 3.74%
August 2008 2.70%

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Overview

Fuel costs are understandably one of the most significant and variable cost components in the transport industry. The Flexible Fuel Factor (FFF) was introduced for the purpose of providing for the increased costs in fuel, primarily diesel, to fairly compensate our couriers and line haul operators.

The FFF will be calculated at the beginning of each month and will be based on the average diesel price from two months earlier1. By using this mechanism, we can:-

  1. Provide transparency for customers to see how it is calculated
  2. Take into account any shifts in the price of fuel that impact significantly on the price of moving courier items
  3. Pass on any reductions, should the price of fuel decrease
  4. Give New Zealand Couriers customers advanced notice of what the FFF will be a month in advance

On 14 October 2013 the fuel price trigger point at which FFF is calculated from, moved to $0.95.

How will this impact my business?

From 14 October 2013 a trigger point of $0.95 cents (diesel retail price including GST) at which FFF for domestic courier services has applied.

Every 1c movement above $0.95 in the average retail pump price over a calendar month, results in a 0.1% increase in our service and product pricing. This is updated monthly and will be automatically adjusted on your invoice.

International Courier Services will be subject to a separate Flexible Fuel Factor2.

The rates for our Flexible Fuel Factors will be recalculated on a monthly basis for the coming month so you are able to take this into account.


1Average diesel retail price as published by the Ministry of Business, Innovation and Employment which they refer to as the "main port price". We will calculate the FFF for any given month using the average diesel retail price from two months earlier.

2The costs of our international services are strongly impacted by the cost of jet kerosene, and as a result require a separate International FFF

FAQs

Q: What is a Flexible Fuel Factor (FFF)?

A: The total price you pay for a courier product / service will comprise of three components - the base price of products / services, the Flexible Fuel Factor and the RUC surcharge. This is calculated by multiplying the base price of the products/services by (the Flexible Fuel Factor + RUC surcharge), then adding this figure to the original base price to get the total price.

For example:

If a ticket costs $10.00 and the FFF for the month is 2.70% / RUC surcharge is 2.00%, then:
Base price + base price x ( FFF + RUC ) = Total Price + GST
$10.00 + $10.00 x ( 2.70% FFF + 2.00%RUC ) = $10.47 + GST
    FFF and RUC surcharge = $0.47 + GST

The Flexible Fuel Factor was introduced for the purpose of providing for the volatility in fuel prices to fairly compensate our couriers and line haul operators - whilst also ensuring our customers benefit from any drop in the price of fuel. For more information on RUC surcharge click here.

Q: What does "trigger point" mean?

The "trigger point" is the retail cost of diesel fuel at which the FFF will start to be charged on your courier products/services.

Q: What is the "trigger point" at which I will be charged an FFF?

Domestic Courier Rates – The trigger point is $0.95 (this is based on average diesel retail pump price inclusive of GST over a calendar month).

We calculate the FFF percentage for any given month using the average diesel retail prices (main port price) from two months earlier. For every 1c movement in the average main port price, our rates will move by +/- 0.1% (click here to see the "Flexible Fuel Factor Increase Table")

International Courier Rates - The costs of our international services are strongly impacted by the cost of jet kerosene and the Flexible Fuel Factor will be dictated by our international partners (with jet kerosene being a key factor). This figure is adjusted monthly. Please click here for specific information on our international FFF.

Q: Why has the domestic trigger point changed since August 2008?

Much of the increased costs we bore over the past years were attributable to unpredictable fuel pricing movement not being fully offset by the initial FFF trigger point. We have reduced the rate to maintain transparency as to our cost structure, rather than imposing a series of price hikes when/if fuel costs increase. By doing this, we have a mechanism in place that our customers benefit from in those times when fuel costs are lower.

Q: How do I find out the current rate?

A: Our website will be updated each month with the FFF surcharge percentage for the next month. You can find the current rate here at the top of the Flexible Fuel Factor page.

Q: How will the FFF appear on my invoice/statement?

A: We will include the FFF in the price of the charges listed on your invoice/statement. This allows you complete visibility as to the total price of each item.

Q: How often will the FFF be reviewed?

A: We will review the average price of fuel each month. If the average diesel retail pump price fluctuates, our FFF will rise and fall in line with fuel prices. The FFF mechanism can be reviewed if New Zealand Couriers believes that business conditions require this.

Q: How do I manage this increase within my business?

A: We will implement a two month lag to try and provide a buffer in regard to the latest increases, and each month we will post the FFF surcharge percentage for the next month on our website. The rate for each subsequent month will be based on the average price two months prior.

Q: How long will the FFF apply to my account for?

A: Should the retail price of diesel (incl GST) drop below our FFF trigger point of $0.95 per litre, the FFF will revert to 0% (after the two month buffer).

Q: What has happened with the price of diesel?

A: To view the "Weekly oil price monitoring" information as published by the Ministry of Business, Innovation and Employment go to the Ministry's website here, this shows the average diesel retail pump price in New Zealand which is referred to as "main port price". At the time of first looking to implement the FFF (July 2008), diesel prices had risen by 85% over the previous year.

Q: Why a different FFF for domestic Courier Services and International Courier Services?

A: In terms of fuel, the greatest impact on our domestic courier network (i.e. within New Zealand) comes from movement in diesel prices; the greatest impact on our international courier network (ie exports/imports to/from New Zealand) comes from movement in jet kerosene prices.

Movements in diesel and jet kerosene prices are not always directly aligned - the purpose of the FFF is purely to pass on incremental costs, not increase margin, by creating two separate FFFs we can offer our customers increased transparency.

Q: How does the Emissions Trading Scheme impact the FFF?

A: The New Zealand Emissions Trading Scheme (ETS) is part of the Government’s primary response to global climate change. Effective 1st July 2010 an additional tax has been applied to fuel, and passed on through the pump price.

For more information on the ETS visit www.climatechange.govt.nz/emissions-trading-scheme.


Historic Diesel Price Graph

Click here to view the historic diesel price graph

Data courtesy of the Ministry of Business, Innovation and Employment

Flexible Fuel Factor Increase Table

Click here to show more data
$1.061.10%
$1.071.20%
$1.081.30%
$1.091.40%
$1.101.50%
$1.111.60%
$1.121.70%
$1.131.80%
$1.141.90%
$1.152.00%
$1.162.10%
$1.172.20%
$1.182.30%
$1.192.40%
$1.202.50%
$1.212.60%
$1.222.70%
$1.232.80%
$1.242.90%
$1.253.00%
$1.263.10%
$1.273.20%
$1.283.30%
$1.293.40%
$1.303.50%
$1.313.60%
$1.323.70%
$1.333.80%
$1.343.90%
$1.354.00%
$1.364.10%
$1.374.20%
$1.384.30%
$1.394.40%
$1.404.50%
$1.414.60%
$1.424.70%
$1.434.80%
$1.444.90%
$1.455.00%
$1.465.10%
$1.475.20%
$1.485.30%
$1.495.40%
$1.505.50%
$1.515.60%
$1.525.70%
$1.535.80%
$1.545.90%
$1.556.00%
$1.566.10%
$1.576.20%
$1.586.30%
$1.596.40%
$1.606.50%
$1.616.60%
$1.626.70%
$1.636.80%
$1.646.90%
$1.657.00%
$1.667.10%
$1.677.20%
$1.687.30%
$1.697.40%
$1.707.50%
$1.717.60%
$1.727.70%
$1.737.80%
$1.747.90%
$1.758.00%
$1.768.10%
$1.778.20%
$1.788.30%
$1.798.40%
$1.808.50%
$1.818.60%
$1.828.70%
$1.838.80%
$1.848.90%
$1.859.00%
$1.869.10%
$1.879.20%
$1.889.30%
$1.899.40%
$1.909.50%
$1.919.60%
$1.929.70%
$1.939.80%
$1.949.90%
$1.9510.00%
$1.9610.10%
$1.9710.20%
$1.9810.30%
$1.9910.40%
$2.0010.50%