By Louis du Plessis
CEO Pollen Finance | Sept 15, 2026 | 5 min read
Logistics businesses can manage fuel price volatility by monitoring fuel cost per kilometre, using fuel surcharges, improving route efficiency, controlling driver behaviour, negotiating supplier rates and maintaining enough working capital to absorb short-term price changes.
The goal is not to predict fuel prices perfectly. It is to build a business that can adapt when they move.
Few industries feel a fuel price change as quickly as logistics. For most consumers, a fuel increase means spending a little more at the pump. For a transport business, on the other hand, it can change the economics of an entire route.
A fleet may travel thousands of kilometres every week. So, a small change per litre becomes a significant cost across dozens of vehicles. And when margins are already tight, that volatility matters.
Fuel is one of the largest variable expenses in transport. Unlike rent or insurance, it changes with activity.
The challenge is that customer contracts do not always adjust as quickly as operating costs do. A transport company may agree to a fixed rate today. Fuel costs may change before the contract is completed. The business absorbs the difference unless the agreement allows for adjustment.
Logistics businesses should understand their operating cost at vehicle level.
That includes:
Fuel cost per kilometre gives business owners a much clearer view than total monthly fuel spend. It shows where efficiency is improving and where margins are disappearing.
Some logistics businesses include a fuel surcharge in customer pricing. This allows rates to adjust when fuel prices move significantly. A surcharge can help protect margins, particularly on longer-term contracts.
The important thing is transparency. Customers should understand how the surcharge is calculated, when it changes, and which fuel benchmark is used.
A vague surcharge can create customer friction. Whereas a clearly defined mechanism creates predictability for both sides.
The cheapest litre of fuel is the one you do not need to use. Route optimisation can reduce distance travelled, idling, and time in traffic.
Technology can help, but so can better planning. Small efficiencies across a large fleet can create meaningful savings.
Acceleration, harsh braking, excessive idling, and speed are all examples of poor driving habits that affect fuel consumption. Telematics can help businesses identify patterns and coach drivers more effectively.
Managing fuel is not only a procurement exercise, it is an operational one.
Vehicles that are poorly maintained often use more fuel. Businesses should monitor tyre pressure, engine condition, and vehicle loading.
Preventative maintenance costs money, but poor maintenance usually costs more.
Larger logistics businesses may be able to negotiate fleet cards, depot pricing, or rebates. Even small savings per litre can become significant across a large annual fuel bill.
Fuel price increases create an immediate cash requirement although customer pricing may adjust later. That delay can put pressure on working capital. A logistics business may still need to fill vehicles and maintain its fleet.
This is where sufficient cash reserves or working capital can help absorb short-term volatility. Funding should not be used to hide permanently unprofitable routes. But it can help an otherwise healthy business manage a temporary cost movement.
Adding vehicles increases revenue potential. It also increases exposure to fuel costs. Before expanding, transport businesses should model vehicle repayments, insurance, and drivers.
Our article Fleet Expansion Funding Explained looks at the broader economics of adding vehicles to a growing fleet.
Funders may consider:
The strength of the business is not simply how many vehicles it owns. It is how effectively those vehicles generate revenue.
Long-term fixed pricing can expose the business to significant cost increases.
Cost per kilometre provides much better operational insight.
Driving patterns can meaningfully affect consumption.
Empty kilometres still cost money.
A bigger fleet is only valuable if the vehicles are working.
This is the part I think matters most. Business owners spend a lot of energy worrying about things they cannot control. Fuel prices are one of them. You cannot determine what the next adjustment will be.
But you can control:
That is where resilient businesses focus.
Volatility is part of running a logistics business. Fuel prices will move, customer demand will change, and routes will become more or less profitable.
The goal is to build enough visibility and flexibility into the business that uncertainty can be managed. Because the strongest logistics businesses are not necessarily the ones paying the lowest fuel price. They are the ones that know exactly what every kilometre costs, and have built their business accordingly.
About the author
Louis du Plessis is the CEO of Pollen Finance, helping established South African businesses access funding to seize growth opportunities. He writes about business funding, cash flow and entrepreneurship, drawing on over a decade of experience working alongside SMEs.
