GlossaryKind of term: Cost and economicsRush surcharge
What is a rush surcharge?
A rush surcharge is an extra charge for delivery in less time than your normal lead time, covering what speeding up costs and displaces.
A rush order arises, for example, when a machine is down at the customer's site or a rejected part has to be remade. The surcharge is often added as a percentage of the price or as a fixed amount per order.
How does a rush surcharge work in practice?
What rush costs depends on shop loading and the route. Possible items are overtime in the evening or at the weekend, other work that has to give way and may run late itself, a running batch that comes off the machine and has to be set up again later, and a subcontractor's rush rate for anodising, hardening or coating. That last item shows up in the subcontract line. On a route with a subcontracted step, the subcontractor often decides whether the date is achievable, not your own machine. Rush can also raise the chance of errors when there is less time for program checks or first-article inspection.
What is a rush surcharge often confused with?
A rush surcharge is not a risk allowance: risk is about uncertainty in making the part, rush about the delivery date.
Frequently asked questions
How much should a rush surcharge be?
There is no fixed figure. Work out what rush costs you in this case: overtime, work that has to give way, an extra setup and your subcontractor's rush price. That is the floor; the rest is a commercial choice.
Can I turn down a rush order?
Yes, unless a framework agreement says otherwise. If the order does not fit without making other work run late, state the lead time you can meet, or the price and conditions under which the rush date becomes achievable.