Fastway Shields SMEs From Fuel Price Volatility With Fixed Courier Cost Increase Strategy

While many courier providers rely on dynamic fuel surcharges that fluctuate monthly and ultimately pass the fuel increase to customers, Fastway has taken a different approach, one that deliberately shields its customers from volatility and limits the impact of rising logistics cost.

Unlike the industry-standard dynamic fuel surcharge – which can range from 18% to as high as 52.68% – Fastway’s fixed 5% increase is designed to bring stability to an otherwise unpredictable cost category. This means businesses are not exposed to monthly pricing swings linked to global oil prices or local fuel adjustments.

According to Damian Velayadum, financial director at Fastway Couriers, fuel accounts for between 20% and 40% of total operating costs in logistics, and it is no surprise that the Transport and Logistics sector is under immense pressure given fuel has risen by 68.2% in over a month. Despite this, Fastway has resisted passing on the full cost burden to customers.

Velayadum explains: “For a small business, unpredictability is often more damaging than the increase itself. By removing the ‘monthly surprise’ from invoices, we enable SMEs to price their own products and delivery fees with confidence.”

“The 5% adjustment is not a full recovery of fuel cost increases, it’s a contribution,” says Velayadum. “We’ve made a deliberate decision to absorb a significant portion of the increase internally because our priority is maintaining long-term partnerships with our customers, particularly small and medium-sized enterprises.

“We are seeing strong activity from SMEs, but we also recognise that they are operating in a very constrained environment. Our role is to ensure that delivery remains a manageable cost, not a barrier to growth.”

The company’s pricing philosophy is built around simplicity and transparency which is a key consideration for smaller businesses without large finance or logistics teams. By avoiding complex surcharge structures, Fastway reduces the administrative burden on customers, particularly home-based businesses and e-commerce retailers.

At the core of Fastway’s approach is what it describes as a shared-cost model – a deliberate departure from the industry norm of passing increases directly on to customers.

Fastway has also confirmed that rates will be adjusted downwards if fuel prices return to pre-April levels, reinforcing its commitment to fairness and transparency.

As South Africa’s SME sector continues to grow – particularly in e-commerce and home-based businesses – logistics providers are playing an increasingly critical role in enabling scale.

Fastway’s approach signals a broader positioning: delivery should support business growth, not hinder it. “SMEs are the backbone of our economy,” says Velayadum. “Every decision we make – including pricing – is measured against how it will impact them. If we can help them remain competitive, we all grow.”

For more information on Fastway Couriers, head to the website.