How to Calculate Fuel Surcharge for Trucking
A fuel surcharge is the extra amount a carrier adds to the linehaul rate when diesel costs more than the price the rate was built on. It moves with the weekly diesel price, so the base rate doesn't have to be renegotiated every time fuel goes up or down.
Here's how to work it out.
What is a fuel surcharge in trucking?
When a carrier and a shipper agree on a rate, they also agree on a base fuel price, sometimes called the peg. As long as diesel stays at or below that price, there's no surcharge. When diesel goes above it, the carrier bills the difference, spread across the miles driven.
Most contracts use the U.S. Energy Information Administration's weekly national average for on-highway diesel as the current price, because it's public and updated every Monday.
The fuel surcharge formula
Surcharge per mile = (current diesel price - base price) / truck MPG
Then:
Trip surcharge = surcharge per mile x billed miles
If the current price is at or below the base price, the surcharge is zero.
A worked example
These numbers are only an example. Use the base price and MPG from your own contract and trucks.
- Base price in the contract: $1.25 per gallon
- This week's diesel price: $3.75 per gallon
- Truck fuel economy: 6.5 MPG
- Trip: 500 billed miles
Surcharge per mile = (3.75 - 1.25) / 6.5 = $0.3846, about 38 cents per mile
Trip surcharge = 0.3846 x 500 = $192.31
If the linehaul rate is $2.50 per mile, the surcharge is 0.3846 / 2.50 = about 15% of linehaul.
Using a fuel surcharge table
Many shippers publish a table instead of the formula: each row is a 10-cent band of diesel prices and the surcharge per mile for that band. It's the same math, figured at the low end of each band. Our fuel surcharge calculator builds that table from this week's national diesel price, your base price and your MPG.
What the surcharge doesn't cover
The surcharge pays for fuel on the miles you bill. It doesn't cover fuel burned while a truck idles at a dock, sits running overnight, or drives empty to the next load, unless your contract says otherwise.
That fuel is a real cost, and it's easy to miss. A GPS tracker on each truck shows how many hours it spends idling and how many miles it drives empty, so you can see what that fuel costs and price it into your rates. See fleet GPS tracking .
To see what every mile costs you, fuel and everything else, try our cost per mile calculator .
Fuel surcharge FAQ
Who sets the base fuel price?
It's negotiated in the contract between carrier and shipper or broker. There is no single national base price.
Which diesel price should I use?
Whatever your contract names. Most use the EIA weekly U.S. on-highway diesel average, released each Monday. Some use a regional EIA average instead.
Is the fuel surcharge charged on empty miles?
Usually it's charged on the miles you bill. Check your contract; some lanes include it on deadhead.
How often does the surcharge change?
Most contracts update it weekly, when the new EIA price comes out.
What MPG should I use?
Your contract may set one. If not, use your trucks' real average, not the best case. Lower MPG means a higher surcharge per mile.
