Fuel price volatility is one of the largest and most unpredictable operating costs for carriers. Diesel prices can change weekly, sometimes dramatically, making long-term pricing risky without protection against sudden spikes. Fuel surcharges exist to help carriers manage that volatility instead of absorbing sudden cost increases that could destroy profit margins. This article explains what a fuel surcharge is, how it works, how it's calculated, and how to manage fuel costs alongside it.
Key takeaways
- Fuel surcharges protect carrier margins – these fees adjust freight rates when diesel prices exceed baseline levels, preventing carriers from absorbing unpredictable fuel cost spikes.
- EIA diesel prices drive weekly updates – most surcharges reference U.S. Energy Information Administration data to calculate fair adjustments based on current market conditions.
- Surcharges change frequently based on formulas – weekly or monthly adjustments using baseline prices and truck MPG determine how much carriers receive per mile.
- Fuel planning still matters for profitability – surcharges offset some costs but don't eliminate the need for route optimization and discount programs that maximize savings.
Table of contents
- What Is a Fuel Surcharge?
- Why Fuel Surcharges Exist in Trucking
- How a Fuel Surcharge Works (Step-by-Step)
- Fuel Surcharge Calculation Example (Trucking)
- How Fuel Surcharges Are Billed
- Who Pays the Fuel Surcharge?
- Fuel Surcharge vs. Base Freight Rate
- Common Fuel Surcharge Mistakes Carriers Make
- Take Control of Fuel Costs Beyond the Surcharge
- FAQs
What is a fuel surcharge?
A fuel surcharge is an additional fee added to a freight rate to help carriers recover fuel costs when diesel prices rise above a set baseline. In trucking, fuel surcharges are commonly calculated on a per-mile basis and adjusted weekly or monthly using average diesel price data published by the U.S. Energy Information Administration (EIA).
These surcharges create transparency for shippers and brokers while protecting carrier margins from unpredictable fuel market swings.
Why fuel surcharges exist in trucking
Diesel prices fluctuate weekly and cannot be locked into long-term freight rates. Base freight rates are negotiated assuming a specific fuel price at the time of the agreement.
When diesel prices rise unexpectedly, carriers sometimes absorb the difference without a surcharge, cutting into profitability and threatening business stability. Fuel surcharges help stabilize carrier margins and create transparency for shippers and brokers. EIA data shows diesel prices move weekly at the national and regional level, reinforcing why static pricing creates risk for trucking operations.
How a fuel surcharge works (step-by-step)
This is a simplified, common approach used in contracts. Specific terms vary by agreement, but most fuel surcharges follow these basic steps.
Step 1: Establish a base fuel price
The base fuel price is set in the carrier-shipper or carrier-broker agreement. For example, a base price might be $4.00 per gallon. This represents the fuel cost already built into the freight rate when the contract was negotiated.
Step 2: Track current diesel prices
Most carriers reference U.S. Energy Information Administration (EIA) weekly on-highway diesel prices. These prices can be national or regional averages, depending on contract terms.
Current reference point for December 2025: U.S. average on-highway diesel price is approximately $3.60 to $3.70 per gallon, depending on week and region. Current diesel market conditions affect how surcharges are calculated and applied, particularly during seasonal changes like winter blend diesel fuel transitions.
Step 3: Apply a fuel surcharge formula
When the current diesel price exceeds the base price, the surcharge is triggered. The surcharge is adjusted weekly or monthly based on the agreement using a standard formula that accounts for fuel efficiency.
Fuel Surcharge Calculation Example (Trucking)
The basic fuel surcharge formula looks like this:
(Current Diesel Price – Base Diesel Price) ÷ Truck MPG = Fuel Surcharge per Mile
Here's how it works with realistic numbers:
- Base diesel price: $4.00 per gallon
- Current diesel price: $4.75 per gallon
- Truck fuel efficiency: 6.5 MPG
Calculation: ($4.75 – $4.00) ÷ 6.5 = $0.115 per mile
These numbers are for demonstration only. Actual surcharge amounts depend on contract terms and MPG assumptions. Different agreements may use different baselines and efficiency rates.
How carriers receive fuel surcharges
Fuel surcharges appear as separate line items on your freight invoices from shippers or brokers. The amount you receive depends on how your customer calculates the surcharge and how often they update it based on current diesel prices.
Per-mile fuel surcharges
Per-mile surcharges are the most common method in trucking. Shippers and brokers calculate these based on the distance you drove, making compensation fair for both short-haul and long-haul operations.
Flat or percentage-based surcharges
Flat or percentage-based surcharges are less common but sometimes used for short-haul or dedicated lanes. These surcharges are calculated as a percentage of the total freight cost rather than mileage.
Weekly vs. monthly adjustments
Weekly updates better reflect fast-changing diesel prices and protect you from sudden spikes. Monthly updates offer predictability but may lag real fuel costs, potentially leaving you exposed during rapid price increases.
Who pays the fuel surcharge?
Shippers ultimately pay fuel surcharges as part of the total freight cost. Brokers may pass the surcharge through to carriers based on contract terms. Carriers should confirm surcharge details before accepting a load.
FMCSA has proposed stronger broker transparency rules requiring clearer disclosure of charges and surcharges. These regulations reinforce the importance of reviewing rate confirmations carefully before accepting loads.
Fuel surcharge vs. base freight rate
The difference between base rates and surcharges helps carriers evaluate total compensation:
- Base freight rate covers fixed operating costs – driver pay, insurance, maintenance, and standard operating expenses
- Fuel surcharge addresses variable diesel costs – adjusts based on current fuel prices
- Fuel surcharges fluctuate with market prices – weekly or monthly adjustments reflect diesel market changes
- Base rates typically remain stable – change less frequently than surcharges
- Separating the two improves pricing clarity – carriers see exactly how much compensation comes from hauling versus fuel cost recovery
Common fuel surcharge mistakes carriers make
Carriers often make these errors when managing fuel surcharges:
- Not confirming how often surcharges are updated
- Assuming fuel surcharges fully cover all fuel cost increases
- Ignoring regional diesel price differences
- Failing to track the true cost per mile, including all fuel expenses
Some carriers offset rising fuel costs by using fuel cards that offer per-gallon discounts at in-network truck stops. The OTR Fuel Card provides average savings of $0.50 per gallon with discounts up to $2.25 per gallon at 2,500+ locations, helping reduce the gap between fuel surcharges and actual fuel costs.
Take control of fuel costs beyond the surcharge
Fuel surcharges provide important protection against diesel price volatility, but they don't eliminate the need for smart fuel management. Carriers should track fuel spend alongside cost per mile, use fuel cards and route planning tools to reduce per-gallon costs, and monitor diesel prices consistently.
The OTR Fuel Card delivers average savings of $0.50 per gallon at 2,500+ in-network locations and is accepted at 8,000+ locations nationwide. Discounts reach up to $2.25 per gallon at select in-network truck stops, helping owner-operators and fleets maximize their fuel budgets beyond what surcharges recover. Calculate your potential savings to see how much you could save each month.
Get started with OTR Solutions to access fuel savings, factoring services, and dedicated support designed specifically for trucking operations.
Frequently asked questions
Are fuel surcharges mandatory in trucking?
No. Fuel surcharges are negotiated as part of carrier-shipper or carrier-broker agreements, but they are extremely common across the industry.
How often do fuel surcharges change?
Most are updated weekly using EIA diesel price data, though some contracts use monthly adjustments depending on negotiated terms.
Do owner-operators get fuel surcharges?
Yes, if the rate confirmation or contract includes a fuel surcharge. Carriers should verify surcharge terms before accepting loads to understand the trucking industry challenges they face with fuel cost recovery.
Does a fuel surcharge guarantee profit?
No. Fuel surcharges help offset rising fuel costs but do not guarantee full cost recovery or protect against other operational expenses.
