What is a fuel surcharge?
A fuel surcharge is a per-mile amount added on top of the line rate to absorb the gap between a base diesel price agreed in the contract and what diesel actually costs this week. It exists so nobody has to renegotiate the rate every time fuel moves 20¢.
The formula
FSC per mile = (current diesel average − base price) ÷ assumed mpg
Three inputs, and all three are negotiable — which is the part most carriers never act on.
| Input | Typical | What to watch |
|---|---|---|
| Current diesel average | The EIA weekly on-highway retail average, $6.53 for the week of 21 Sep 2026 | National or regional? Regional is fairer on the West Coast and worse on the Gulf. |
| Base price | $1.25 is the most common legacy figure | Fixed years ago in many contracts. The lower the base, the more surcharge you get. |
| Assumed mpg | 6.0 | The lever shippers move. 6.0 pays more than 6.5 for the same fuel price. |
Worked, at this week's number
With diesel at $6.53, a $1.25 base and 6.0 mpg assumed, the surcharge is 88¢ a mile — on a 500-mile load, $439.92 on top of the line rate.
| If diesel is | FSC per mile | On a 500-mile load |
|---|---|---|
| $3.50 | 38¢ | $187.50 |
| $4.50 | 54¢ | $270.83 |
| $5.00 | 62¢ | $312.50 |
| $5.50 | 71¢ | $354.17 |
| $6.00 | 79¢ | $395.83 |
| $6.53 | 88¢ | $440.00 |
| $7.00 | 96¢ | $479.17 |
Base $1.25, 6.0 mpg assumed. Live diesel figure from the U.S. EIA weekly retail on-highway average, refreshed every Monday.
Why it rarely covers the fuel
Run the two sides against each other. At $6.53 and a real 6.5 mpg, your fuel costs 100¢ a mile. The surcharge pays 88¢. The line rate is quietly carrying the 12¢ difference — which is fine, as long as you priced the line rate knowing that.
The trap is treating the surcharge as though it makes fuel someone else's problem. It does not. It dampens the movement; it does not remove the cost.
What to negotiate
- The base, before the percentage. Dropping a $1.25 base to $1.10 adds 2¢ a mile at any fuel price. It is the easiest ask and the one nobody makes.
- The mpg assumption. 6.0 is standard; anything above it is the shipper moving cost onto you.
- Regional vs national. If your lanes live on the West Coast, where diesel is $7.46 against a national $6.53, ask for the regional index.
- Whether it pays on all miles or loaded miles. Loaded-only is the norm and means your deadhead fuel is uncovered — see deadhead.
Questions
What is a fuel surcharge?
A separate per-mile amount added to a freight rate to cover the difference between a base fuel price written into the contract and what diesel actually costs this week. It moves with the published diesel average so the line rate itself does not have to be renegotiated every time fuel moves.
How is a fuel surcharge calculated?
Three numbers: the current diesel average, a base price below which no surcharge is paid, and an assumed mpg. The surcharge per mile is (current price − base) ÷ mpg. With this week's $6.53 average, a $1.25 base and 6.0 mpg, that is 88¢ a mile.
What diesel price do fuel surcharges use?
Almost always the U.S. Energy Information Administration's weekly retail on-highway diesel average, published every Monday afternoon and often called the DOE average. Some contracts use the regional figure for the lane instead of the national one.
Does the fuel surcharge cover my fuel?
Rarely all of it. The mpg assumption in the formula is usually 6.0, which is generous to the shipper — if your truck does 6.5 you come out ahead, and if it does 5.8 through mountains you do not. The base price is also negotiable and is often left at a number set years ago.
Is the fuel surcharge taxable income?
Yes. It is freight revenue like any other line on the invoice. It is not a reimbursement and it does not get special treatment — which also means the fuel it pays for is deductible in the normal way.