A fuel surcharge is an additional fee added above the current contract rate when the cost of fuel exceeds a defined level. It is a mechanism in the trucking industry that helps balance the fluctuations in the cost of fuel. The purpose of a fuel surcharge is to provide a flat rate that allows the cost of fuel to be incorporated into shipping rates in a fair manner and allows shippers to have a fixed fuel cost they can count on. The fuel surcharge is calculated based on the difference between the current fuel price and the fuel price baseline, which is taken from the carriers cost of operation figures. The calculation is based on the average miles per gallon of a truck. The fuel surcharge can be a difficult thing to understand when it comes to calculating rates.

It is important to note that there is no rule, law, or regulation mandating a fuel surcharge. However, small carriers with direct shipper freight contracts must incorporate a fuel surcharge. Good carriers will typically pass through 100% of the fuel surcharge to their leased-on owner-operators (OO) . This allows the leased OO to offset the higher price of fuel.

It is also worth noting that fuel surcharges are not limited to the trucking industry. Airlines also charge fuel surcharges, which are technically levied as "carrier-imposed surcharges". However, there is an important distinction between the two. While carrier-imposed surcharges can be charged arbitrarily, fuel surcharges are regulated by the U.S. Department of Transportation.

In summary, a fuel surcharge is an additional fee added to the current contract rate when the cost of fuel exceeds a defined level. It is a mechanism in the trucking industry that helps balance the fluctuations in the cost of fuel. The fuel surcharge is calculated based on the difference between the current fuel price and the fuel price baseline, which is taken from the carriers cost of operation figures. While there is no rule, law, or regulation mandating a fuel surcharge, small carriers with direct shipper freight contracts must incorporate a fuel surcharge.