Dear Sir/Madam,

Due to the instability of the fuel markets which affects financial condition of TSL companies, we are compelled to introduce a fuel cost adjustment for international land transportation services, effective January 1st 2008.
Thanks to the fuel cost adjustment it will be possible to automatically adjust prices of the services provided to your company if changes of the market price of diesel fuel oil independent of the logistic operator should occur. That will limit the frequent changes in our base price tables.
The fuel cost adjustment protects the interests of both cooperating parties as the mechanism is applied when the fuel prices rise, as well as when they fall.
The amount of fuel cost adjustment will be provided to you one month in advance, which will enable you to better plan your business activities.
Details related to the adjustment algorithm and its amount depending on fuel prices can be found on our website.
We believe you will understand the necessity to introduce principles of adequacy of service charges to diesel fuel oil prices.

Yours faithfully,
Tomasz Cegielski
Land International Director

 

The fuel clause is a mechanism which allows to react quickly to changes of diesel fuel oil prices which are independent of the logistic operator.

Key information concerning the clause is presented below:

• Introducing the clause allows to avoid frequent changes in the base price tables for services offered by Schenker as the mechanism automatically reflects changes of the fuel prices;
• Current fuel prices are based on wholesale prices offered by PKN Orlen and Grupa LOTOS, which allows to eliminate the influence of petrol stations profit margins in particular regions of Poland on the dynamics of average price change;
• The mechanism is applied when the fuel prices rise, as well as when they fall, which result in either a freight surcharge or an additional discount for the Client;
• Weekly reading of current diesel oil prices allows to match the amount of the so-called fuel cost adjustment with current (not predicted) situation on the fuel market;
• Changes of the current index are not effected after each fuel price change but only after a sensitivity threshold has been passed; in the case of domestic shipment the threshold pass must be confirmed by two consecutive readings, and in the case of international shipment - within one month;
• The fuel cost adjustment is listed on invoices as a separate item, which allows to observe its influence on logistic costs.