Big Changes Coming to the DP3 International Fuel Surcharge for the 2023 Cycle
By Paula Alder
There’s a significant change in the Department of Defense’s Personal Property Program (DP3) in terms of how fuel surcharge is calculated in the International Tender for 2023 (IT-23). The IT-23 has several changes to Item 513 for the applicable fuel surcharge (FSC) for the transportation that occurs in CONUS, Hawaii, and Alaska on international shipments. Effective May 15, 2023, the amount TSPs can bill for fuel surcharge will be significantly less, the item code used to bill the charge has changed, and the fuel surcharge mileage may not match the mileage for the related transportation charge due to changes in the locations used to calculate fuel.
The most significant change is the rate table that is used to calculate the FSC on shipments delivered from destination storage-in-transit (SIT). Effective with the IT-23, the 530 linehaul rate table will be used to determine the base amount to calculate the fuel surcharge. Historically, the rate table used was the 520 SIT delivery tables. This change results in a reduction of the FSC amount that can be billed, by an average of 55-75% of what you would’ve expected in previous years.
The fuel surcharge is billed using items 513A or 513B. In the IT-23, there has been a change to when each item is used.
- Item 513A is used to bill the fuel surcharge that applies to transportation charges for shipments moved directly from the origin residence to the port or from the port to the destination residence rather than being used for the FSC for all linehaul-related charges.
- Item 513B is the item code used to bill the fuel on shipments that have moved from residence to origin SIT, from origin SIT to port, from port to destination SIT, or from destination SIT to residence rather than all delivery FSC charges.
There was also a slight change to the locations used to calculate mileage to determine the base amount. For shipments delivering from destination SIT, the mileage for fuel surcharge is calculated using the final delivery location, rather than block 18 which is used to calculate the actual delivery from SIT charge. When calculating the FSC for shipments going into origin SIT, the mileage is calculated from the pick-up address to the actual warehouse location, rather than from block 19 to block 19, as the delivery into storage charge is figured. Depending on the circumstance, the change in the locations being used may result in more or fewer miles calculated for the fuel surcharge, and overall should be a wash.
If you do work in the DoD program handling the domestic leg of international shipments in CONUS, Alaska, and Hawaii, these are changes you need to make sure you understand.