How is the fuel surcharge calculated?

The most common fuel surcharge formula uses the Department of Energy national average diesel price. The formula is: (Current DOE price - Base fuel price) / Truck MPG = Fuel surcharge per mile. For example, if diesel is $4.00, the base price is $1.25, and your MPG is 6, the surcharge is ($4.00 - $1.25) / 6 = $0.458 per mile. The base fuel price and MPG assumption vary by contract. The DOE publishes the national average diesel price every Monday.

Do brokers always pass through the full fuel surcharge?

Not always. Some brokers quote all-in rates that include fuel surcharge, making it impossible to verify the surcharge separately. Others list the surcharge as a line item but calculate it using different base prices or MPG assumptions than what the shipper pays, keeping the difference. The best practice is to negotiate fuel surcharge terms explicitly and verify the calculation on every rate confirmation.

What is the DOE diesel price and where do I find it?

The Department of Energy publishes the weekly national average retail diesel price every Monday through the Energy Information Administration at eia.gov. This price is the most commonly used benchmark for fuel surcharge calculations in trucking. The DOE also publishes regional diesel prices. Your fuel surcharge contract should specify which DOE price applies -- national average or a specific regional price.

Should I negotiate fuel surcharge separately from the line haul rate?

Yes, whenever possible. Separating the fuel surcharge from the line haul rate protects you when fuel prices rise. With an all-in rate, fuel price increases eat directly into your profit margin. With a separate fuel surcharge, the surcharge adjusts automatically as diesel prices change, keeping your effective rate closer to your target profit. This is especially important on dedicated lanes or contract freight where rates are locked for extended periods.

Fuel Surcharge in Trucking Explained

What Is a Fuel Surcharge

A fuel surcharge is an additional per-mile charge added to the base freight rate that compensates carriers for diesel fuel costs above a predetermined baseline price. When diesel prices rise, the fuel surcharge increases. When prices fall, it decreases. The surcharge exists to protect both carriers and shippers from the volatility of fuel prices.

In practice, the fuel surcharge appears as a separate line item on your rate confirmation alongside the line haul rate. A rate confirmation might show $2.00 per mile line haul plus $0.45 per mile fuel surcharge for a total of $2.45 per mile.

Understanding how fuel surcharges work directly affects your profitability. The surcharge should offset your actual fuel costs, but that only works if the calculation is fair. Use our cost per mile calculator to see how fuel costs factor into your total operating expenses.

How Fuel Surcharges Are Calculated

The standard fuel surcharge formula has three components:

The Formula

(Current diesel price - Base fuel price) / MPG assumption = Fuel surcharge per mile

Current diesel price: Usually the Department of Energy (DOE) national average retail diesel price published weekly by the Energy Information Administration.[^1] Some contracts use regional DOE prices.

Base fuel price: A fixed price point established in the contract, below which no fuel surcharge applies. Common base prices range from $1.00 to $1.50 per gallon. The base price is essentially the fuel cost already built into the line haul rate.

MPG assumption: The estimated fuel efficiency used in the calculation, typically 5.5 to 6.5 MPG. Lower MPG assumptions produce higher surcharges per mile.

Example Calculation

Current DOE diesel price: $3.85/gallon Base fuel price: $1.20/gallon MPG assumption: 6.0

Fuel surcharge = ($3.85 - $1.20) / 6.0 = $0.442 per mile

On a 500-mile load, that is $221 in fuel surcharge on top of the line haul rate.

Fuel Surcharge on Spot Market vs Contract Freight

How the fuel surcharge works depends on whether you are hauling spot market loads or contract freight.

Spot Market

On the spot market, most brokers quote all-in rates that bundle the fuel surcharge into a single per-mile number. When you see a load posted at $2.50 per mile on a load board, that typically includes the fuel surcharge. The disadvantage is that you cannot verify how the surcharge was calculated or whether it fairly reflects current fuel prices.

Some spot market brokers will break out the fuel surcharge if you ask, but many will not. When fuel prices are high, all-in spot rates should adjust upward to reflect those costs. When they do not, carriers take the hit.

Contract Freight

On contract freight and dedicated lanes, fuel surcharges are almost always broken out as a separate line item with a defined formula. This protects you over the length of the contract because the surcharge automatically adjusts as diesel prices change.

When negotiating contract rates, pay close attention to the fuel surcharge formula. The base price, MPG assumption, and which DOE price index is used all affect how much you receive. For tips on negotiating these terms, see our freight rate negotiation guide.

Verifying Your Fuel Surcharge

Do not assume the fuel surcharge on your rate confirmation is correct. Verify it.

Check the DOE price. Look up the current DOE national average diesel price at eia.gov for the week the load was booked or the week specified in your contract.[^1]

Know your contract terms. Understand the base price and MPG assumption in your fuel surcharge agreement. Different shippers and brokers use different assumptions.

Do the math. Calculate the surcharge yourself using the formula and compare it to what appears on the rate confirmation. Discrepancies happen more often than you would expect.

Watch for fuel surcharge caps. Some contracts cap the fuel surcharge at a maximum amount regardless of how high diesel prices go. This means if diesel spikes above the cap threshold, you absorb the additional cost. Avoid contracts with low surcharge caps.

Fuel Surcharge and Your Bottom Line

The fuel surcharge should roughly offset your actual fuel cost on a given load.[^2] Whether it does depends on the formula and your truck's real-world fuel efficiency.

If the surcharge formula assumes 6.0 MPG but your truck averages 5.5 MPG, you are underpaid on fuel. If your truck averages 6.5 MPG, the surcharge works in your favor. This is one reason that fuel efficiency improvements through proper maintenance, speed management, and fuel card discounts have a direct bottom-line impact.

Track your actual MPG against the surcharge assumptions in your contracts. If there is a consistent gap, it should inform your rate negotiation strategy. The fuel surcharge is supposed to make you whole on fuel costs, and it only works if the assumptions match reality.

For IFTA reporting purposes, fuel surcharge revenue is part of your gross income and does not change how fuel tax calculations work. The surcharge affects your revenue line, while fuel taxes are calculated based on miles driven and fuel purchased in each jurisdiction.

Frequently Asked Questions

How is the fuel surcharge calculated?: The most common fuel surcharge formula uses the Department of Energy national average diesel price. The formula is: (Current DOE price - Base fuel price) / Truck MPG = Fuel surcharge per mile. For example, if diesel is $4.00, the base price is $1.25, and your MPG is 6, the surcharge is ($4.00 - $1.25) / 6 = $0.458 per mile. The base fuel price and MPG assumption vary by contract. The DOE publishes the national average diesel price every Monday.
Do brokers always pass through the full fuel surcharge?: Not always. Some brokers quote all-in rates that include fuel surcharge, making it impossible to verify the surcharge separately. Others list the surcharge as a line item but calculate it using different base prices or MPG assumptions than what the shipper pays, keeping the difference. The best practice is to negotiate fuel surcharge terms explicitly and verify the calculation on every rate confirmation.
What is the DOE diesel price and where do I find it?: The Department of Energy publishes the weekly national average retail diesel price every Monday through the Energy Information Administration at eia.gov. This price is the most commonly used benchmark for fuel surcharge calculations in trucking. The DOE also publishes regional diesel prices. Your fuel surcharge contract should specify which DOE price applies -- national average or a specific regional price.
Should I negotiate fuel surcharge separately from the line haul rate?: Yes, whenever possible. Separating the fuel surcharge from the line haul rate protects you when fuel prices rise. With an all-in rate, fuel price increases eat directly into your profit margin. With a separate fuel surcharge, the surcharge adjusts automatically as diesel prices change, keeping your effective rate closer to your target profit. This is especially important on dedicated lanes or contract freight where rates are locked for extended periods.

Sources & References (2)

Government

U.S. Energy Information Administration — Weekly Retail Gasoline and Diesel Prices

eia.gov ↗

Industry

American Transportation Research Institute — An Analysis of the Operational Costs of Trucking (2023)

truckingresearch.org ↗