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  7. Fuel Surcharge
Commercial

Fuel Surcharge

Definition

An additional charge assessed on top of the base freight rate to recover fluctuating diesel fuel costs, typically indexed to the weekly U.S. on-highway diesel fuel price published by the U.S. Energy Information Administration. Fuel surcharges are applied as a percentage of the linehaul rate or as a flat amount per car. They became standard after fuel price volatility in the early 2000s.

Related Terms

Rate

The charge per unit (typically per car, per ton, or per container) for transporting a commodity between specified origin and destination points. Rates may be published in tariffs or established through confidential contracts. Rate levels are influenced by distance, commodity, car type, volume, and competitive conditions.

Linehaul

The primary transportation charge for moving freight between origin and destination, covering the over-the-road or mainline portion of the movement. Linehaul rates are the base rate component before the addition of fuel surcharges, accessorials, and terminal charges. Linehaul revenue is the largest single revenue source for railroads.

Accessorial Charges

Additional fees charged by a railroad for services beyond the basic point-to-point transportation, such as reconsignment, storage, demurrage, special handling, or fuel surcharges. Accessorials can significantly increase the total cost of a shipment above the base linehaul rate. Shippers should review tariff schedules carefully to understand all potential accessorial exposure.

Freight Bill

The invoice issued by a railroad to a shipper or third party for transportation services rendered, including linehaul, fuel surcharge, and any applicable accessorial charges. Freight bills may be prepaid (paid by the shipper at origin) or collect (paid by the consignee at destination). Freight bill auditing is a significant function in large shipping operations.

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