Fuel is one of the largest variable cost elements for trucking carriers. A diesel price swing of a few cents per gallon translates into meaningful cost changes across a carrier's entire fleet. The fuel surcharge mechanism allows carriers to pass fuel cost volatility through to shippers without renegotiating base rates with every price movement.
Fuel surcharges are almost universally applied to domestic freight. The surcharge is calculated as a percentage of the linehaul rate or as a flat cents-per-mile amount, tied to a published fuel price index — most commonly the Department of Energy's weekly U.S. average retail diesel price, published every Monday.
Carrier fuel surcharge tables specify a price range and a corresponding surcharge percentage. As the DOE price rises through bands, the surcharge percentage steps up. These tables are published by carriers and incorporated into contract freight agreements by reference.
For contract shippers, the fuel surcharge table is part of the rate negotiation. A carrier may offer a lower base rate but a more aggressive fuel table, or vice versa. Shippers with sophisticated procurement teams analyze the all-in cost at various fuel price scenarios to evaluate which contract structure is preferable.
For spot freight, the fuel surcharge is typically whatever the carrier's published table specifies on the day of booking. It is not usually negotiated separately from the load rate on spot transactions.
Fuel surcharges add transparency to freight pricing — they make it clear how much of the invoice reflects base carrier economics versus fuel cost. The alternative (building fuel cost assumptions into base rates) would make rates less predictable as fuel prices move in both directions.