A trucking fuel surcharge is an integral part of the trucking industry and has been since the 1990's. When the cost of diesel fuel, not to be confused with gas you buy for your family car, had a dramatic increase in cost. Trucking companies scrambled on how to adjust for this increase when they often had contracts with customers that kept rates the same. It was a difficult conversion process, but trucking companies adopted the trucking fuel surcharge to help control the diesel market's ups and downs on costs. Today, nearly every trucking company has a fuel surcharge table in their contracts with customers that assigns a cost increase or decrease as the cost of diesel fuel changes.
The fuel costs of the truck is one of the larger expenses to operate a truck. There are many things that can affect fuel expense:
The US Energy Information Administration publishes a weekly update on the average cost of diesel fuel. The department breaks down these costs to averages in different parts of the country.
The US government does not set the trucking fuel surcharge rates only the average cost of fuel. It his up to the trucking company and their customer to agree on a fuel surcharge rate. It is this reason why you may see so many different trucking fuel surcharge rates.
Typically a company, whether that be a trucking company or a manufacturing company, will use a table or matrix to calculate the trucking fuel surcharge. The table will include a column of diesel prices paid at the pump and a corresponding column of the fuel surcharge price to charge.
Example $2.95/gallon might be $.33/mile additional cost to the Rate Per Mile (RPM). So a shipping lane that cost 1.50 under "normal" hauling costs would now cost 1.83 based on the increase in fuel costs.
Line Haul RPM + Fuel Surcharge = Total Rate Per Mile (RPM)
$1.50 + $.33 = $1.83
There are other ways in which companies may calculate FSC rates, but no matter, the basic principal applies to create a value based on the increase and decrease of the cost of diesel fuel.
