Fuel surcharge exists because diesel prices move and freight rates don’t. Without FSC, a carrier quoting a load in January and running it in March absorbs whatever happened to fuel prices in between. The surcharge passes that variable cost to the shipper.
Most large carriers apply FSC systematically. Many small carriers apply it inconsistently — sometimes billing it, sometimes forgetting, sometimes using a flat rate that hasn’t been updated since 2022. The result is real revenue walking out the door on every load.
The Two FSC Formulas
Formula 1 — Percentage of linehaul:
FSC = linehaul rate × FSC percentage
If the linehaul is $2,800 and the FSC rate is 22%, the fuel surcharge is $616. The percentage changes as fuel prices change.
Formula 2 — Per kilometre rate:
FSC = distance × rate per km
If the load is 850 km and the rate is $0.18/km, the FSC is $153. This method is more transparent and easier for customers to reconcile.
Which you use depends on what you’ve agreed with your customers. Many brokers and shippers have standard FSC schedules they apply. If you haven’t negotiated one, the per-km method is easier to explain and defend.
The critical point on both methods: FSC applies to the linehaul rate only — not to accessorials, not to other charges. Calculating FSC on the invoice total inflates the charge and creates problems on audit.
DOE Pricing for US Cross-Border Loads
For loads crossing into the United States, most carriers reference the US Department of Energy’s weekly retail on-highway diesel price. The DOE publishes prices every Monday for the prior week, making it an objective, publicly available benchmark.
The standard approach is a fuel surcharge schedule — a table mapping DOE price ranges to FSC percentages — agreed with the broker or shipper in advance:
- DOE $3.50–$3.75/gallon → 18% FSC
- DOE $3.75–$4.00/gallon → 21% FSC
- DOE $4.00–$4.25/gallon → 24% FSC
The applicable rate is whichever row matches the DOE price at the time of the load. No negotiating each load — the schedule handles it automatically.
Canadian Domestic Fuel Reference
Canada doesn’t have a single national index equivalent to the DOE. For domestic loads, carriers typically reference Natural Resources Canada’s provincial average diesel prices, or use a negotiated baseline agreed with the customer.
The FSC schedule for Canadian domestic loads is usually expressed per kilometre rather than as a percentage, and the rate is adjusted periodically as fuel prices shift. Set a review interval — quarterly is typical — and adjust when the spread between your baseline and actual pump prices exceeds a threshold that matters to your margins.
What Goes on the Invoice
A properly itemized FSC line item shows the calculation basis:
Linehaul (Vancouver → Calgary, 1,050 km): $2,200.00 Fuel Surcharge ($0.19/km × 1,050 km): $199.50 Subtotal: $2,399.50 GST (5%): $119.98 Total: $2,519.48
Fuel surcharge is taxable in Canada — it’s part of the freight service and gets the same GST/HST treatment as the linehaul rate. If the load is zero-rated (cross-border), the FSC is also zero-rated.
A lump FSC number with no basis shown is a customer dispute waiting to happen. Show the math.
Four Mistakes That Cost Carriers Revenue
Not billing FSC at all. More common than it should be. Over a year of loads at $150–$400 FSC per load depending on distance, this is a significant revenue leak.
Using a flat rate that doesn’t track fuel prices. If your FSC says 20% and fuel has moved 30% since you set it, you’re absorbing the difference on every load. Tie your rate to a published index.
Calculating FSC on the full invoice instead of the linehaul. If you have accessorials on the invoice, FSC doesn’t apply to them. Apply it to the linehaul only.
Forgetting GST/HST on FSC. FSC is part of the freight service. It gets taxed the same way as the linehaul. Include it in the taxable subtotal.
How CyVeR Handles Fuel Surcharge
CyVeR’s fuel surcharge module lets you configure a per-kilometre or percentage-based FSC schedule. When an order is created, FSC is calculated automatically based on the load distance and your configured rate, and added as a line item on the invoice draft. For US loads, you reference the DOE schedule. For Canadian loads, you set your own rate.
Fuel surcharge is available on the Pro plan.