Truckload Fuel Surcharges: How They Work and What They Cost

Making sense of truckload fuel surcharges: index, peg, & escalator

Can you make truckload fuel surcharges less expensive by altering the way fuel surcharge programs are structured? While some shippers maintain that by judiciously selecting values for these components, they can cut the cost of surcharges and their total truckload rates (fuel surcharge plus line haul). The reality is not so clear cut.

By drawing on extensive experience with creating and applying fuel surcharge programs—and by incorporating groundbreaking research—this white paper maps the components of these programs and explains how each variable impacts overall costs.

Most carriers and shippers participate in a fuel program of some kind. Understanding how they work is the first step to control costs. This white paper explains:

• How fuel surcharges work
• Standard measurements for diesel prices
• If common techniques to reduce fuel charges actually work
• Future impact of surcharges

In addition to discussing how the index, peg, and escalator work, this paper answers the following questions:

• Will raising the peg lower my total costs?
• Will changing the index lower my total costs?
• Will raising the escalator for fuel efficiency lower costs?