Fuel Surcharge Index
A fuel surcharge is a fee — calculated as the percentage of a base rate — that enables transportation companies to cover the fluctuating cost of fuel.
Why is There a Fuel Surcharge in Trucking?
Fuel is one of the most expensive components of trucking transportation, and a fuel surcharge allows companies to limit risk without having to raise prices across the board. Even when national fuel prices dip, many industries — taxi services, airlines, delivery companies, etc. — need to continue charging fuel surcharge rates for various reasons:
- Fluctuating gasoline prices inject uncertainty. Just because fuel is lower one day doesn’t mean it will remain that way. Rates can change day to day, and certain regions may experience higher fuel costs than others.
- The trucking industry relies on diesel. Even though consumer gas prices may be low, that is not always the case for shipping companies that use diesel fuel. This is why fuel surcharges are common in the trucking industry.
By separating fuel surcharge calculations from base rates, customers can be assured they are receiving a timely and accurate quote based on current conditions.
How Do I Conduct a Fuel Surcharge Calculation?
Each company uses its own formula for calculating its surcharge. Our fuel surcharge calculation is based on the currently reported U.S. National Average Diesel Fuel Index, published by the Energy Information Administration of the U.S. Department of Energy. The level of the fuel surcharge is adjusted on Wednesday based upon the U.S. National Average Diesel Fuel Index of the prior Monday.
If the National Average Fuel Index is not updated on the prior Monday, the next updated National Average Fuel Index posted prior to Wednesday will be used to calculate the fuel surcharge level for that week beginning on Wednesday and ending on Tuesday of the following week. In the event the National Average Fuel Index is not updated by Tuesday, the previous week’s index will be used.
The fuel surcharge will be shown as a separate entry on our freight bill and will be applied to all line-haul charges, with applicable discounts, but not to special service charges.
For further explanation, see the ArcBest Rules and Special Service Charges Guide.
Click here to view the LTL Fuel Surcharge.