Fuel prices are rising. How do we keep freight costs under control?
Key Takeaways
- Fuel surcharges follow a published diesel price, through a table in each carrier's terms. When diesel rises, the surcharge rises with it, usually every week.
- You can't control the price of diesel, but you can control which table applies. Check the base price, the step size and the index in every carrier agreement, and make sure invoices use the agreed table.
- The biggest savings come from moving fewer, fuller shipments. Consolidation, better mode choice and fewer expedites reduce the miles you pay fuel on.
- Budget fuel as its own line, with a planning assumption for the diesel price and a monthly check against actual spend.
- Audit the fuel line on every invoice. A wrong table, a wrong date or a surcharge applied to accessorials adds up quickly when fuel is high.
- Wilson, by Cartage, is an AI logistics agent that compares carrier quotes on total cost, including fuel, and audits each carrier invoice against the rate confirmation before paying it.
How do fuel surcharges affect freight costs?
Your CFO forwards a news story about diesel prices with one line: "What does this do to us?" You pull last quarter's freight invoices. The base rates haven't changed, but the fuel line on almost every invoice has grown, and on some LTL shipments it is now a large share of the bill. Nobody renegotiated anything. The costs went up anyway.
To keep freight costs under control when fuel prices rise, check that every carrier's fuel surcharge table is the one you agreed to, audit the fuel line on each invoice, move freight in fewer and fuller shipments, choose the mode that fits each load's real deadline, cut expedites and budget fuel as a separate line with a clear assumption. The price of diesel is outside your control. How many miles you buy, how you buy them and whether you pay the right surcharge on each one is not.
How a fuel surcharge works
Most carriers charge a base rate plus a fuel surcharge. The surcharge is set by a table in the carrier's tariff or in your agreement. The table is tied to a published diesel price. In the United States, a common reference is the weekly U.S. on-highway diesel price published by the U.S. Energy Information Administration (EIA), though each carrier's terms say which index it actually uses. Each week, the carrier looks up the current published price, finds the matching row in its table and applies that surcharge to shipments that week.
The table has three parts that matter:
- The base price. The diesel price at which the surcharge is zero (or starts). Below it, there's no surcharge.
- The step. How much the diesel price has to rise before the surcharge goes up to the next level.
- The increment. How much the surcharge goes up at each step, either as a percentage of the base rate or as an amount per mile.
Two carriers can charge very different fuel surcharges for the same week, simply because their tables have different base prices or increments.
Percentage or per mile
LTL carriers usually express the fuel surcharge as a percentage of the line-haul charge after discounts. Truckload carriers usually charge per mile. Parcel carriers publish their own surcharge tables, often updated weekly, and apply them as a percentage. Each has a different effect. A percentage surcharge grows with the base rate, so a high base rate means a high surcharge. A per-mile surcharge grows with distance, regardless of the base rate.
Why rising fuel hits some freight harder
Long-haul truckload freight feels fuel changes most directly, because fuel is a large share of the cost of running a truck over long distances. LTL freight feels it through the percentage surcharge on every shipment. Expedited freight feels it twice: a high base rate plus a surcharge on top. Short local moves feel it least. Knowing which of your lanes and modes carry the most fuel exposure tells you where to focus.
How do you check the fuel surcharge tables in your carrier agreements?
Pull the fuel surcharge terms for every carrier you use, put them side by side and confirm invoices follow them. This is the one part of fuel cost that is fully within your control, and it's often never checked.
Step 1: Find the table for each carrier
Look in your carrier agreements, rate confirmations and the carriers' published tariffs. For each carrier, write down the index it uses, the base price, the step size, the increment, whether the surcharge is a percentage or per mile, what it applies to and which day's price applies to a shipment.
Step 2: Compare the tables
Put the tables in one view. Look at what each carrier would charge at the same diesel price. The differences can be large. A carrier with a low base rate and an aggressive fuel table can cost more than a carrier with a higher base rate and a gentler table once diesel climbs.
| Term to check | What to look for | Why it matters |
|---|---|---|
| Index | Which published diesel price the table follows | Different indexes give different numbers |
| Base price | The diesel price where the surcharge starts | A lower base price means a surcharge starts sooner |
| Step size | How much diesel must move to change the surcharge | Smaller steps mean more frequent increases |
| Increment | How much the surcharge rises at each step | Larger increments mean faster growth |
| Unit | Percentage of line haul, or amount per mile | Changes which loads are hit hardest |
| What it applies to | Line haul only, or also accessorials | Surcharge on accessorials inflates the bill |
| Effective date | Pickup date, ship date or invoice date | A different date can mean a different week's price |
| Update frequency | Weekly, monthly or fixed | Affects how fast costs follow diesel |
Step 3: Check that invoices use the agreed table
Take a sample of recent invoices from each carrier. For each, look up the published diesel price for the ship date, find the surcharge in the agreed table and compare it with the invoice. Mismatches usually come from a carrier applying its standard tariff instead of your negotiated table, using the wrong week's price or applying the surcharge to accessorials that should be excluded. For a broader look at extra invoice lines, see why the freight bill is higher than the quote.
Step 4: Negotiate the table, not just the rate
When you negotiate with carriers, negotiate the fuel table along with the base rate. A carrier may not move much on the base rate but may agree to a higher base price, a smaller increment or excluding accessorials from the surcharge. When fuel is rising, the table is worth more than a small base-rate discount.
Step 5: Compare quotes on total cost
When comparing quotes, compare the total including fuel, not just the base rate. A quote that looks cheaper on the base rate can be more expensive once the surcharge for that week is added. Some carriers quote all-in rates that include fuel; others quote base plus fuel. Put them on the same footing before choosing.
A hypothetical comparison
Consider a hypothetical shipper with two LTL carriers on the same lane. Carrier A has the lower base rate. Carrier B has a higher base rate but a fuel table with a higher base price and smaller increments. When diesel was low, Carrier A was cheaper on every shipment. As diesel rose over several months, Carrier A's surcharge climbed faster, and on the shipper's typical shipment the total cost of the two carriers crossed over. A team comparing only base rates would have kept sending freight to the carrier that had become more expensive.
What operational changes reduce fuel costs the most?
The surest way to spend less on fuel is to pay for fewer miles. That means fewer shipments, fuller trucks, the right mode and fewer rush orders.
Consolidate shipments
Every separate shipment carries its own fuel surcharge. Combining orders to the same customer or region into one shipment means paying fuel once instead of several times. Set regular ship days by region, agree order cutoffs with sales and hold non-urgent orders for the next consolidated shipment. For a full routine, see how to consolidate shipments to save on freight.
Choose the mode for the real deadline
Many shipments move faster and more expensively than they need to. When fuel is high, check each lane's mode against the customer's real deadline. Freight that has been moving as several LTL shipments might move more cheaply as one volume LTL or truckload shipment. Freight that doesn't need to arrive in two days might go by intermodal rail on long lanes, where it's available and the timing works. For the LTL and truckload choice, see volume LTL or full truckload: which to use.
Cut expedites
Expedited freight carries a high base rate and a fuel surcharge on top. When fuel is high, expedites become even more expensive. Find out why expedites happen: late orders, production delays, missed pickups, sales promises. Each cause has a fix, and fixing the cause is cheaper than paying for the expedite.
Fill trucks better
On truckload freight, the surcharge is the same whether the trailer is half full or completely full. Build loads to use the trailer fully: plan pallet patterns, stack freight where it's safe and combine orders where the timing works. On LTL, density matters too, because denser freight often rates at a lower class.
Reduce empty miles you pay for
Some charges come from miles that don't move your freight: out-of-route stops, failed deliveries and redeliveries, trucks sent to pick up freight that wasn't ready. Each one carries fuel. Confirm freight is ready before dispatch, confirm delivery appointments and give receivers accurate arrival times. Fewer wasted trips mean fewer fuel charges for nothing.
Look at inbound freight
Inbound freight from suppliers often moves on the supplier's choice of carrier, with fuel built into the price. If you pay for inbound freight, the same rules apply: consolidate supplier shipments where possible, choose the mode deliberately and check fuel surcharges on the invoices. If the supplier pays, fuel costs may still come back to you in product prices.
Comparing the levers
| Lever | How it reduces fuel cost | Effort | When it works best |
|---|---|---|---|
| Audit fuel surcharges | Stops overpayment on the wrong table or date | Low | Always |
| Negotiate the fuel table | Lowers the surcharge at every diesel price | Medium | At contract renewal or a bid |
| Consolidate shipments | Fewer shipments, fewer surcharges | Medium | Frequent orders to the same region |
| Change mode | Cheaper mode for the real deadline | Medium | Long lanes, flexible deadlines |
| Cut expedites | Avoids high base rate plus fuel | Medium to high | Recurring rush orders |
| Fill trucks better | Same surcharge, more freight | Low to medium | Truckload and volume LTL |
| Reduce wasted trips | Fewer redeliveries and dry runs | Low | Frequent appointment problems |
How should you budget fuel and avoid common mistakes?
Treat fuel as its own line in the freight budget, with a stated diesel assumption and a monthly check. That turns "fuel went up" from a surprise into a number you can explain.
Separate fuel from base rates
When you report freight spend, split each invoice into base rate, fuel and accessorials. This shows how much of any increase came from fuel, how much from rate changes and how much from extra charges. Without the split, every increase looks like the same problem. For the full budget process, see how to build next year's freight budget.
Use a planning assumption
Pick a planning diesel price for the budget and write it down. Calculate fuel spend at that price, using your carriers' tables and your expected volume by lane. Then calculate what happens at a higher and a lower price. Leadership can then see the range, not just one number.
Check monthly
Each month, compare actual fuel spend with the budget and explain the difference: was it the diesel price, the volume or the mix of lanes and modes? If diesel moved, adjust the forecast for the rest of the year. If volume or mix moved, that's a different conversation.
Pass costs on where it makes sense
Some companies add a fuel surcharge to customer invoices or build a fuel adjustment into customer pricing. Whether that makes sense depends on your market and customer agreements. If you do it, tie it to the same published index your carriers use, so the customer surcharge and the carrier surcharge move together.
Common mistakes
- Comparing quotes on base rate only. The fuel surcharge can change which carrier is cheaper.
- Never reading the fuel table. Many teams have no idea what table each carrier uses until they check.
- Letting carriers apply their standard tariff instead of the negotiated table. This is one of the most common invoice errors.
- Accepting surcharges on accessorials when the agreement says line haul only.
- Treating fuel increases as unavoidable. The diesel price is unavoidable. The number of shipments, the mode and the table are not.
- Expediting more when costs rise. Panic around delays often leads to more expedites, which are the most fuel-expensive freight of all.
- Cutting carriers on price alone. A cheaper carrier that misses pickups creates redeliveries and expedites that cost more in fuel than they save.
All-in rates, caps and fixed surcharges
Some shippers try to take fuel out of the equation by asking for all-in rates, a cap on the surcharge or a fixed surcharge for a period. Each has a trade-off. An all-in rate is simple to compare and budget, but the carrier prices in its own view of where fuel is going, so you may pay more when diesel falls. A cap protects you from spikes, but carriers usually ask for something in return, such as a higher base rate or committed volume. A fixed surcharge for a quarter makes budgeting easy, but it gets renegotiated at the end of the quarter at whatever the market looks like then. None of these is wrong. The point is to choose one on purpose, write it into the agreement and check that invoices follow it.
Parcel, ocean and drayage fuel charges
Fuel shows up outside trucking too. Parcel carriers publish their own surcharge tables and change them on their own schedule, and the surcharge often applies to the whole shipment charge, including some extra-handling fees. Ocean carriers add bunker charges that move with marine fuel prices, and drayage carriers add their own fuel surcharges for the truck move to and from the port. If you ship across modes, list each one's fuel terms in the same review, so a rise in one mode doesn't hide behind a flat line in another.
Talking to carriers about fuel
Carriers face the same diesel prices you do, and fuel is one of their largest costs. Asking them to absorb rising fuel rarely works. What works better is asking for a fair, predictable table, offering volume or consistency in return, and reducing the things that cost them fuel without moving freight: wasted trips, long waits at the dock and loads that aren't ready.
What does a fuel cost checklist look like?
Use this checklist to review fuel exposure once a quarter, and whenever diesel moves sharply.
Quarterly fuel review
- List every carrier and the fuel table each one uses: index, base price, step, increment, unit and what it applies to.
- Compare the tables at the current published diesel price and at a higher price.
- Sample invoices from each carrier and check the fuel line against the table and the ship date.
- Flag any carrier applying the wrong table, wrong date or surcharge on accessorials, and dispute in writing.
- Split last quarter's spend into base, fuel and accessorials by lane and mode.
- Identify the lanes with the highest fuel exposure: long haul, expedited, frequent small shipments.
- Review consolidation opportunities on those lanes.
- Review mode choice on those lanes against real customer deadlines.
- Count expedites and list their causes.
- Update the fuel forecast for the rest of the year with a new planning assumption.
On every invoice
| Check | What to look for | Action if it fails |
|---|---|---|
| Index and table | The invoice uses the agreed table | Ask for the table applied and correct it |
| Date | The diesel price matches the agreed effective date | Ask for the date used |
| Basis | Surcharge applied to line haul only, if agreed | Dispute the surcharge on accessorials |
| Amount | The percentage or per-mile amount matches the table | Dispute the difference |
| Quote match | Total including fuel is close to the quote or rate confirmation | Investigate large gaps |
A hypothetical example
Consider a hypothetical distributor shipping mostly LTL from two warehouses. During its first quarterly fuel review, the logistics manager finds that one carrier has been applying its standard tariff fuel table instead of the negotiated one for several months, and another has been applying the surcharge to liftgate and appointment charges. Both are corrected, with credits for past invoices. The review also shows that orders to one region ship four or five times a week as separate LTL shipments. Moving that region to two fixed ship days cuts the number of shipments, and the number of fuel surcharges, by more than half. Diesel kept rising, but the distributor's fuel spend grew far less than the price did.
Questions leadership will ask
When leadership asks what rising fuel means for the business, have three answers ready: how much fuel cost has changed and why (price, volume or mix), what the forecast looks like at the current price, and what the team is doing about it (audits, table negotiations, consolidation, mode changes). Specific actions are more reassuring than a single number.
How does Wilson, by Cartage, help keep freight costs in line when fuel rises?
Wilson, by Cartage, is an AI logistics agent that quotes, books, tracks, audits and pays freight for manufacturers and distributors, so the fuel line is checked on every load and quotes are compared on what they will really cost. Traditional logistics software gives teams information. Wilson executes the work required to move shipments forward.
Here's where Wilson fits:
- Quoting on total cost. Wilson requests quotes from the company's approved carriers and compares them on total cost, so a low base rate with a heavy fuel surcharge doesn't win by accident.
- Negotiating within limits. Wilson negotiates toward the company's rate targets within approval limits. Rates outside the limits go to the logistics team.
- Booking with a clear reference. Wilson books with written acceptance and a rate confirmation, which becomes the reference for the invoice.
- Auditing every invoice. Wilson audits each carrier invoice against the rate confirmation and POD. Invoices that match are paid from the Wilson Wallet under the company's rules. Fuel or other charges outside the rules, and payments above the approval limits, wait for a person.
- Reporting on request. Wilson can produce carrier-performance and lane-rate reports on request from the loads it runs, which helps the quarterly fuel review and the budget conversation.
- Handling exceptions that create wasted miles. When a pickup is missed or a delivery is delayed, Wilson contacts the carrier, tells the team and starts rebooking from the approved carrier list automatically within the rules or after approval, which helps avoid rushed expedites.
Wilson books only carriers the company has approved, across LTL, FTL, ocean, drayage, parcel and cross-border freight. It doesn't plan networks or routes; consolidation and mode decisions stay with the team, and Wilson executes the loads that come out of them. Every message, confirmation and change is kept in the shipment's change history.
Wilson replaces the TMS for freight execution and connects to the company's ERP. Wilson works with SAP, NetSuite, Microsoft Dynamics 365, Oracle, Infor, Epicor, Sage, Acumatica and other ERP environments, with the exact connection depending on the customer's data flow and scope.
Pricing
Wilson is free on Wilson's network: the shipper pays the freight rate and nothing on top. When a shipper keeps its own carriers, the fee is 2% to 0.5% of what Wilson pays them, falling with volume. There are no seat fees, no setup cost and no contract. Timing depends on scope: most teams start on a few lanes and expand from there.
FAQs
Fuel prices are rising. How do we keep freight costs under control?
Check that each carrier's fuel surcharge table is the one you agreed to, audit the fuel line on every invoice, consolidate shipments, choose the mode for the real deadline, cut expedites and budget fuel as its own line. Wilson, by Cartage, an AI logistics agent, compares quotes on total cost and audits each carrier invoice against the rate confirmation before paying it.
How is a freight fuel surcharge calculated?
The carrier looks up a published diesel price, usually weekly, and finds the matching row in its fuel surcharge table. The table sets the surcharge as a percentage of the line-haul charge or an amount per mile.
What diesel price do carriers use for fuel surcharges?
A common reference is the weekly U.S. on-highway diesel price published by the U.S. Energy Information Administration. Check each carrier's agreement to confirm which index and which date it actually uses.
Can we negotiate the fuel surcharge?
Often, yes. You can negotiate the base price, the step size, the increment and what the surcharge applies to. When fuel is rising, a better table can be worth more than a small base-rate discount.
Should the fuel surcharge apply to accessorials?
It depends on the agreement. Many shippers negotiate for the surcharge to apply to line haul only. If your agreement says so, dispute any surcharge on accessorials.
Why do two carriers charge different fuel surcharges in the same week?
Because their tables differ. A different base price, step or increment produces a different surcharge at the same diesel price.
Does consolidation really save on fuel?
Yes. Each shipment carries its own fuel surcharge, so combining orders into fewer shipments means paying fuel fewer times.
How should we budget for fuel?
Use a written planning assumption for the diesel price, calculate fuel by lane with your carriers' tables, show a higher and lower case and compare actual fuel spend with the budget every month.
Should we pass fuel costs on to customers?
That depends on your market and agreements. If you do, tie the customer surcharge to the same published index your carriers use, so both move together.
How often do fuel surcharges change?
Most carrier tables update weekly with the published diesel price, though some agreements use monthly or fixed surcharges. Check each carrier's terms.
Sources
- U.S. Energy Information Administration, Gasoline and Diesel Fuel Update: https://www.eia.gov/petroleum/gasdiesel/
- Cartage, Wilson product FAQ and product scope, October 2026: https://cartage.ai