What a fuel surcharge is — and why it protects your margin
A fuel surcharge (FSC) is an extra, variable fee added to a freight rate to offset diesel price swings. It protects the carrier when fuel spikes and protects the shipper from paying an inflated base rate when fuel is cheap. Instead of constantly renegotiating line-haul rates, both sides agree on a base "peg" price; when diesel rises above it, the shipper pays a per-mile surcharge that tracks the increase.
The three numbers that decide your surcharge
- The diesel index. Almost every contract references the DOE/EIA Weekly On-Highway Diesel price (national or regional). This tool pre-loads the national average.
- The peg. The neutral price where the surcharge is zero — usually around $1.20–$1.25, but negotiable. A lower peg means a bigger surcharge for the same diesel price.
- The MPG assumption. Schedules commonly assume 6.0 MPG. A lower assumed MPG raises the per-mile surcharge.
Make sure you're getting paid for fuel
Many owner-operators leave money on the table by not checking the surcharge on every load — especially on broker freight where FSC may be baked into an "all-in" rate. Run the number here, then make sure your booked rate (line-haul + FSC) clears your cost per mile. To estimate the actual diesel you'll burn, use the Fuel Cost calculator; to price the whole load, use Rate Per Mile.
How is a fuel surcharge calculated in trucking?+
The industry-standard formula is: surcharge per mile = (current diesel price − base/peg price) ÷ truck MPG. Multiply by loaded miles for the total. If diesel is below the peg, the surcharge is zero (or a rebate).
What is the fuel surcharge base or peg?+
The peg is the diesel price at which no surcharge applies — the neutral point. Historically near $1.20–$1.25/gal, though some shippers use higher pegs or a zero peg. It's negotiated, so use your contract's figure.
What diesel price is used for fuel surcharges?+
Most contracts reference the DOE/EIA Weekly Retail On-Highway Diesel price, published every Tuesday — the same index major carriers use. This tool pre-loads the current national average.
What MPG is standard in a fuel surcharge formula?+
Schedules commonly assume 6.0 MPG, though 6.0–7.5 is used. A lower assumed MPG produces a larger surcharge per mile because the fuel increase is spread over fewer miles per gallon.
Who pays the fuel surcharge?+
The shipper or broker pays it to the carrier on top of the base line-haul rate, protecting carriers from diesel spikes and shippers from inflated base rates when fuel is cheap.
Why does a lower peg create a higher surcharge?+
The surcharge is based on how far current diesel sits above the peg. A lower peg means a bigger gap for the same price, so the per-mile surcharge is larger. The negotiated peg matters as much as the formula.
