Fuel surcharge is the variable add-on to freight rates indexed to diesel fuel prices.
Detailed Definition
Most fuel surcharge tables are tied to the weekly US average on-highway diesel price published by the Energy Information Administration, part of the Department of Energy. When the index rises past a base price, the surcharge steps up by a set amount per mile or a set share of the line haul charge; when it falls, the surcharge steps down. Each carrier or contract sets its own base price and step size, so surcharges differ between carriers in the same week.
How truckload and LTL surcharges are applied
For truckload freight the surcharge is usually a cents per mile figure added to the line haul rate, based on the fuel table in the rate agreement. LTL carriers usually apply a percentage of the line haul charge, published in their tariff and updated weekly. In both cases the base fuel price matters as much as the current diesel price: a contract with a higher base price produces a lower surcharge at the same fuel level.
What shippers should check in a fuel table
- Which index and region the table uses, national or regional.
- The base price and step size, and whether they are negotiable.
- Whether the surcharge applies to accessorial charges or only line haul.
- Which week's price applies, often the price published at the start of the shipping week.
- That invoices actually match the published table.
Fuel surcharge on the freight invoice
The fuel surcharge usually appears as its own line on freight invoices, separate from line haul and accessorial charges such as liftgate, residential delivery or detention. Some carriers apply fuel to certain accessorials as well. When auditing freight bills, recalculate the surcharge from the published table and the ship date, and query any line that does not match.
Authoritative Sources
- American Trucking Associations (ATA): the largest national trade association for the US trucking industry.
- Transportation Intermediaries Association (TIA): the trade association representing US freight intermediaries and 3PL operators.
Related Glossary Terms
Frequently Asked Questions
Why do two carriers charge different fuel surcharges in the same week?
Because each carrier or contract uses its own fuel table. Tables differ in the base fuel price, the size of each price step, the surcharge added per step and sometimes the regional index used. A lower line haul rate paired with an aggressive fuel table can cost more than a higher rate with a mild one. Compare all-in costs for your typical lanes and fuel levels rather than base rates alone.
Can fuel surcharges be negotiated?
Often, especially in contract truckload pricing and for shippers with steady volume. Shippers negotiate the base price, the step size or a cap, and some agree on all-in rates with fuel built in. LTL fuel surcharges are usually set in the carrier's tariff, but discounts or custom tables can be part of a pricing agreement. Put whatever you agree in writing, including which fuel index is used and how often it updates.