Quick answer
Rising freight and fuel surcharges hit cash before they hit margin: carriers bill the extra now, while your price list, quotes and contracts take weeks or months to catch up. Measure freight as a share of each sale, reprice the quickest levers first, such as delivery fees and minimum orders, and use a line of credit or short working capital loan only to bridge the lag, not to absorb a permanent cost.
Key points
- The ABS reported transport and freight prices rising strongly in the June quarter 2026, mainly from fuel surcharges.
- Surcharges are billed straight away; your own price rises flow through later.
- Work out freight cost per order and per customer before deciding what to change.
- Delivery fees, minimum orders and consolidation are usually faster to change than list prices.
- Finance should bridge the repricing lag, not carry a cost the business can't recover.
Higher freight and fuel surcharges hit cash before they hit margin. Carriers add the surcharge to this month’s invoice, but your price list, customer contracts and quotes take weeks or months to catch up. Measure the exposure, pull the fastest repricing levers first, and use working capital finance only to bridge the lag, never to soak up a cost you can’t recover.
This isn’t a hypothetical in 2026. The ABS producer price figures for the June quarter, released on 31 July, showed transport, postal and warehousing prices rising strongly, mainly from fuel surcharges across road, rail, water and postal freight. The trigger was higher fuel prices after supply disruptions linked to the closure of the Strait of Hormuz for much of the quarter. The same release showed final demand prices posting their largest quarterly rise since September 2023.
If you move goods for a living, or deliver them to customers, you’ve felt it on your carrier statements.
How do surcharges hit cash before margin?
Think about the timing. A carrier changes its fuel surcharge with a few days’ notice and bills it on the next invoice, often weekly or fortnightly. You pay it on normal terms.
On the other side, your customers are paying prices you set weeks or months ago. Your catalogue went out in winter. Your trade customers have agreed price lists. Your online store promised free delivery over a set amount. Each of those takes time to change, and some can’t change until a contract review.
The result is a squeeze that shows up first in the bank balance. Every week the gap between what you pay to move goods and what you charge for them widens, until your new pricing takes effect. For a business already running tight, that lag alone can push the overdraft to its limit.
How exposed is your business to freight costs?
Before deciding anything, measure it. Pull three months of carrier invoices and sales data, and work out:
| Measure | How to calculate it | Why it matters |
|---|---|---|
| Freight as a share of sales | Total freight cost divided by total sales | Shows how much of each dollar goes on transport |
| Freight cost per order | Freight cost divided by number of orders | Reveals small orders that now lose money |
| Freight by customer or region | Freight cost grouped by customer or postcode | Finds the accounts most hit by surcharges |
| Inbound versus outbound | Supplier freight and customer delivery separated | Shows where you have most control |
| Repricing lag | Weeks until each price change takes effect | Sizes the working capital gap |
Most businesses discover the problem is concentrated. A handful of regional customers, small frequent orders or heavy bulky lines usually account for most of the extra cost.
Which repricing levers work fastest?
Not all fixes are equal. Start with the ones you can change this week:
- Delivery fees. Adjust them, or add a clearly disclosed fuel component.
- Free-delivery thresholds. Raise the minimum order for free delivery.
- Minimum order values. Discourage tiny orders that now cost more to ship than they earn.
- Consolidation. Combine deliveries to the same area or customer on set days.
- Carrier review. Get fresh quotes; surcharge structures differ between carriers.
- List prices. Update them on the next catalogue or price file.
- Contract reviews. Raise freight at the next scheduled review, with carrier notices attached.
The first four can often be done within days. The last three take longer, and that’s the period working capital needs to cover.
Tell customers why. A short note explaining that carriers have lifted fuel surcharges, with the date your changes take effect, lands far better than a surprise line on an invoice. Trade customers in particular are seeing the same surcharges on their own inbound freight, so most will understand. Give your sales team the same explanation, and decide in advance which key accounts get a little longer before the change applies, rather than negotiating it one phone call at a time.
If the lag is going to stretch your account further than it can go, start a quick enquiry. There’s no credit check when you first enquire, and a real person will look at the numbers with you.
Is it a working capital problem or a margin problem?
This is the key question, and it’s worth being honest about.
If you can recover the higher freight through pricing, and you just need time for those changes to flow through, it’s a working capital problem. Finance can bridge it. A business line of credit suits costs that rise and fall with fuel, because you draw only what you need. A short working capital loan suits a defined gap, such as one quarter until a new price list lands. An existing business overdraft may be enough on its own if the lag is short.
If you can’t recover the cost, because customers won’t accept higher prices or a competitor is absorbing freight, it’s a margin problem. Borrowing just postpones the hard decision. The fix is in the product mix, the customer mix or the delivery model.
business.gov.au notes that trade finance covers the gap between paying suppliers and receiving customer payments, and that overdrafts suit short-term gaps rather than long-term funding. The same thinking applies here: match the length of the facility to the length of the lag.
What does this look like for a real business?
Illustrative example. A wholesaler supplies potting mix, fertiliser and garden products to 120 nurseries and hardware stores across two states. Most orders are bulky, many are regional, and delivery has always been included above a minimum order.
When fuel surcharges climb through autumn, the wholesaler’s monthly freight bill rises by about $25k. Its price list for the spring season was sent to customers in July and can’t change until the October update.
The owner measures the exposure and finds a third of the extra cost comes from small top-up orders to remote stores. They raise the free-delivery threshold immediately, consolidate regional deliveries to fortnightly runs, and add a disclosed fuel charge for orders below the new threshold. That recovers roughly half the extra cost straight away.
The rest has to wait for the October price list. To cover the three-month gap, plus the usual spring stock build, the wholesaler draws $90k on a line of credit and repays it through the busy season. Our horticulture grower finance page covers how lenders view garden supply chains, and makers facing the same squeeze may find the manufacturing business loan page useful. Online stores can check the e-commerce business loan page.
What will a lender want to see?
When freight is the reason you’re asking for working capital, a lender will want to understand three things: how big the extra cost is, how long it’ll take to recover, and whether the rest of the business is healthy.
Bring recent carrier invoices showing the surcharges, your sales and margin by month, the repricing steps you’ve already taken and the date the next price change takes effect. Recent business bank statements and your latest BAS round it out. Unsecured and cash-flow options typically run from $5k to $500k, sized on turnover and statements, and property-secured options from $20k to $5m.
Freight bills climbing? Bridge the lag and keep moving
Fuel prices move faster than price lists, and businesses that move goods carry that timing gap whether they like it or not. A facility sized to your repricing lag lets you adjust properly instead of panicking, and it keeps stock flowing while your new prices take effect.
Enquiring takes about 60 seconds, and there’s no credit check when you first enquire. We won’t send your details to a pile of lenders, so you won’t be dodging calls from people you’ve never heard of. A real person reads your situation, including how long your repricing will take, and calls you to talk through options. Please fill the form in accurately so we can match the right option first time.
Frequently asked questions
Why have freight costs gone up so quickly?
The ABS's June quarter 2026 producer price figures showed transport, postal and warehousing prices rising strongly, mainly because of fuel surcharges across road, rail, water and postal freight. Higher fuel prices followed supply disruptions linked to the closure of the Strait of Hormuz for much of the quarter.
Should I borrow to cover higher freight costs?
Only to bridge the gap while your prices catch up. If freight has risen permanently and you can't pass it on, borrowing just delays the problem. Work out how long repricing will take, then size any facility to that period.
What's the fastest way to recover rising freight costs?
Usually changes you control directly: adjusting delivery fees, raising free-delivery thresholds, setting minimum order values and consolidating deliveries. Updating catalogue prices or renegotiating contracts often takes longer.
Can I pass a fuel surcharge on to my customers?
Many businesses do, as a clearly disclosed delivery or fuel charge, but check your contracts and quotes first. Some fixed-price agreements don't allow it until a review date.
What working capital suits a freight cost spike?
A line of credit suits costs that rise and fall with fuel prices, because you draw only what you need. A short working capital loan suits a defined gap, such as covering a quarter until a new price list takes effect.