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Glossary

Fuel Surcharge

A fuel surcharge is an additional per-mile charge added to the freight rate that adjusts for fluctuations in diesel fuel prices, protecting carriers from volatile fuel costs.

What Is Fuel Surcharge?

A fuel surcharge (FSC) is a variable fee added to the base transportation rate that compensates carriers for changes in diesel fuel prices. As diesel prices rise, the fuel surcharge increases; as they fall, it decreases. The surcharge is typically calculated using a formula based on the Department of Energy's weekly national average diesel price and a base fuel price (the price at which the base freight rate was negotiated).

A common fuel surcharge formula works like this: if the current diesel price is $4.00/gallon and the base price is $2.50/gallon, the difference is $1.50. Assuming 6 miles per gallon, the fuel surcharge would be $1.50 / 6 = $0.25/mile. On a 1,000-mile load, that is an additional $250 on top of the base rate.

Fuel surcharges are more common in direct shipper contracts and with larger brokers. Many spot market loads on load boards include the fuel surcharge in the all-in rate, meaning the posted rate already accounts for fuel. When evaluating loads, always clarify whether the rate includes or excludes fuel surcharge — this can mean a difference of $0.15-$0.30/mile.

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Why It Matters

Fuel is your largest operating expense (30-40% of revenue). Without fuel surcharges, a $0.50/gallon increase in diesel could erase your profit margin entirely. Understanding fuel surcharges ensures you are properly compensated for fuel cost fluctuations.

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Real-World Example

Maria has a dedicated lane contract through FF Dispatch at a base rate of $2.50/mile with a fuel surcharge tied to the DOE weekly diesel average. When diesel was $3.50/gallon, her fuel surcharge was $0.17/mile. When diesel spiked to $4.50/gallon, her surcharge jumped to $0.33/mile — automatically adding $480 on a 3,000-mile weekly run. Without the surcharge, Maria would have absorbed that $480 fuel cost increase directly from her profit.
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How FF Dispatch Handles This

FF Dispatch monitors fuel prices and factors fuel surcharges into every rate negotiation. On dedicated lanes and contract freight, we ensure fuel surcharge formulas are fair and transparent. On spot market loads, we verify whether the rate is all-in or excludes fuel surcharge.

Related Terms

Per Mile Rate

The per mile rate is the amount a carrier is paid for each mile driven on a load, and is the primary measure of load profitability in trucking.

Gross Revenue

Gross revenue is the total income a carrier earns from hauling freight before any expenses, commissions, or taxes are deducted.

Rate Confirmation

A rate confirmation is a written agreement between a carrier and broker that specifies the load details, pay rate, pickup/delivery requirements, and terms of the haul.

Freight Broker

A freight broker is a licensed intermediary that connects shippers who need freight moved with carriers who have available trucks, earning a commission on each transaction.

Owner-Operator

An owner-operator is a truck driver who owns or leases their own commercial vehicle and operates as an independent business rather than being employed by a trucking company.

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Frequently Asked Questions

Is the fuel surcharge included in the load board rate?+
Usually yes on spot market loads. The posted rate is typically all-in. On contract and dedicated freight, the fuel surcharge is often a separate line item that adjusts weekly or monthly based on diesel prices.
How is the fuel surcharge calculated?+
Typically based on the difference between current diesel price and a base price, divided by an assumed fuel economy (usually 6 mpg). Example: ($4.00 current - $2.50 base) / 6 mpg = $0.25/mile surcharge.
Can I negotiate the fuel surcharge?+
On contract freight, yes. The base price and fuel economy assumptions in the formula are negotiable. A lower base price or lower assumed fuel economy results in a higher surcharge. Your dispatcher can help negotiate favorable fuel surcharge terms.

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