Fuel Surcharge (FSC)

A Fuel Surcharge (FSC) is a variable fee that carriers add to their base transportation rates to offset fluctuations in diesel fuel prices. Rather than adjusting base rates every time diesel goes up or down by a few cents, carriers use the surcharge as a separate line item that floats with the market. When diesel prices spike, the surcharge increases. When prices drop, it decreases. The base rate stays stable, and the fuel component adjusts on its own.

How Fuel Surcharges Are Calculated

Most trucking carriers use the U.S. Department of Energy’s (DOE) weekly national average diesel price as their benchmark. The carrier publishes a fuel surcharge table that maps diesel price ranges to surcharge percentages. For example, when diesel is $3.50 to $3.59 per gallon, the surcharge might be 22% of the linehaul rate. When diesel climbs to $4.00 to $4.09, the surcharge increases to 28%.

The DOE publishes its national average diesel price every Monday. Carriers typically update their surcharge weekly, applying the new rate to shipments picked up during that week. There is usually a one-week lag: this week’s shipments use last week’s DOE price. This means the surcharge does not reflect real-time fuel costs, but it is close enough for commercial purposes.

For a truckload shipment with a $3,000 linehaul rate, a 25% fuel surcharge adds $750, bringing the total to $3,750. For an LTL shipment with a $400 base rate, the same 25% FSC adds $100. These percentages are typical when diesel is in the $3.80 to $4.20 range, though exact percentages vary by carrier.

Fuel Surcharges by Mode

Truckload carriers typically calculate FSC as a percentage of the linehaul rate or as a cents-per-mile adder. A flat cents-per-mile surcharge (for example, $0.52 per mile) is more transparent because it directly ties the fuel cost to the distance traveled. A 1,000-mile trip at $0.52 per mile adds $520 in fuel surcharge regardless of the base rate.

LTL carriers assess FSC as a percentage of the discounted or undiscounted freight charge. Carriers that apply the surcharge to the undiscounted (gross) rate generate a higher surcharge than those applying it to the discounted (net) rate. This distinction matters when comparing LTL quotes. Two carriers with identical base rates and identical FSC percentages can produce different total costs if one applies the surcharge pre-discount and the other post-discount.

Ocean carriers use a Bunker Adjustment Factor (BAF) rather than a traditional fuel surcharge. BAF covers the cost of marine bunker fuel, which is priced differently from highway diesel. BAF rates are set quarterly or monthly based on average bunker fuel prices at major bunkering ports like Singapore, Rotterdam, and Houston.

Parcel carriers (UPS, FedEx) publish weekly fuel surcharge rates that apply to all domestic and international shipments. These surcharges are based on the DOE diesel index for ground shipments and the DOE jet fuel index for air services. As of 2025, parcel ground fuel surcharges typically range from 8% to 15% of the base rate.

Negotiating Fuel Surcharges

High-volume shippers negotiate fuel surcharge terms as part of their carrier contracts. Common negotiation points include the FSC base threshold (the diesel price below which no surcharge applies), the escalation increments (how much the surcharge increases per cent of diesel price change), and whether the surcharge applies to the gross or net rate.

Some shippers negotiate a fuel surcharge cap, limiting the maximum percentage regardless of how high diesel prices climb. Others negotiate a fuel-inclusive rate where the base rate includes an assumed fuel cost, eliminating the surcharge as a separate line item. Fuel-inclusive rates provide cost certainty but may be set higher than the sum of a base rate plus current FSC if the carrier builds in a buffer for price increases.

Impact on FBA Sellers

For sellers shipping FBA inbound inventory, fuel surcharges affect both inbound freight costs and the rates charged by Amazon’s partnered carrier program. Amazon’s partnered rates include fuel surcharges, but the total rate fluctuates as fuel prices change. Sellers budgeting for inbound shipping should not treat freight costs as fixed. A $0.50 per gallon swing in diesel prices can shift inbound costs by 5% to 10% over the course of a quarter.