How Diesel Prices Affect Your Freight Rates

A fuel surcharge (FSC) is the part of your freight price that changes with diesel costs.

Your base rate covers distance, equipment, and service; the fuel surcharge floats up or down based on widely published and regularly updated diesel prices.

There is no government-set formula; fuel prices aren’t regulated. Each carrier uses its own method, which is why FSC in the final quotes can differ even when fuel prices are the same.

This guide explains what FSC actually is, and why formulas vary depending on the carrier and on a variety of factors.

Key facts about the fuel surcharge

• The fuel surcharge is not regulated by government agencies;
• It has no universal formula;
• Each carrier or logistics provider sets their FSC independently;
• FSC usually follows a public diesel benchmark, such as the weekly USA on-highway diesel price published by the EIA. Some Canadian carriers use a Canadian diesel retail price, as published by Natural Resources Canada (NRC);
• The FSC exists to separate predictable costs (lane + service) from volatile ones (fuel);
• On Freightera, fuel is already included in the all-in rate, so you see the full price up front without needing to calculate FSC yourself.

Why FSC formulas vary

Carriers use different assumptions and inputs when building their FSC models. Common variables include:

• Per-mile add-on vs. percentage of linehaul
• Baseline diesel price
• MPG (miles per gallon)
• Structure of the table (bands, increments, ladders). This means the surcharge rate increases when the diesel price hits certain thresholds. For example: when diesel is $3.00-$3.09/gallon → 22% surcharge; when it hits $3.10-$3.19 → 23% surcharge.

Because these levers differ, FSC lines can vary widely from carrier to carrier, even when the market price of diesel is the same.

How carriers calculate fuel surcharge (in practice):

1) Per-mile FSC (common in truckload)

A simplified formula would be: (Current diesel price − baseline diesel price) ÷ MPG = cents per mile

Each carrier chooses its own baseline and MPG assumptions.

2) Percent of linehaul (common in LTL)

LTL carriers publish tables that map diesel ranges to a percentage of the linehaul base rate.

Example:

$X–$Y diesel → 25% FSC
$Y–$Z diesel → 28% FSC

3) Ladder/step adjustments

Each small increase in diesel price adds a fixed amount to the FSC.

To put it in simple terms:

• Diesel up → FSC up.
• Diesel down → FSC down.

How fuel surcharge appears by mode

LTL freight

• Typically shown as a percentage of linehaul
• Updates weekly following the carrier’s FSC table

FTL freight

• Often shown as cents per mile or a flat charge
• Based on MPG and baseline assumptions

Container / Rail / Intermodal

Ocean and rail carriers may use:

• BAF (Bunker Adjustment Factor)
• Other fuel-driven adjustments inside their tariffs

The mechanics are the same: a separate line that reflects fuel cost volatility.

How Freightera handles fuel surcharges

On Freightera’s freight shipping platform:

• Fuel is built into the all-in price; there’s no separate FSC calculation required;
• If a carrier updates FSC outside the original validity window, the updated total appears before booking.

No. It is not a tax and not government-set. It is a pricing tool carriers use to track public fuel data.

Most carriers update FSC weekly, not daily, based on published diesel averages.

One carrier’s FSC can be higher than another’s because they use different baselines, MPG assumptions, diesel indexes, and calculation methods. When you compare quotes, focus on the total all-in price, not the fuel line on its own.

Sometimes, through a contracted formula tied to a published index. Generally, unless you negotiate a fully fixed rate, FSC will still move with fuel.

No. The rate you see already includes fuel.

One may use a higher base rate with a lower FSC; another may use a lower base rate with a higher FSC. Focus on the total cost for the same service level.