Pop Goes the Diesel – Weasel out of Fuel Surcharges ?

Remember the phrase “Pop Goes the Weasel” ? Well, the old phrase dates back from the 19th-century English nursery rhyme. It refers to pawning a coat to pay for your food and drink. I wonder, do we need to weasel out of something to buy Diesel now? In the video you’ll hear “…a penny for a spool of thread, a penny for a needle… How about a penny for diesel?

Every freight invoice has a line most people skim right past: the fuel surcharge. It used to be a small add-on that moved up and down with the price of diesel. Today it can be a third or more of your base shipping rate, and it doesn’t always come back down when fuel does. Presently, the US Export Fuel Surcharge (FSC) is 37.25% for the week of October 26 to November 1, 2026.

I have been in International Logistics since 1991, and I have watched fuel surcharges go up with every war, pipeline and hurricane. What’s different now is that diesel isn’t the only thing behind them anymore. The big parcel carriers have rewritten the tables they use to calculate the surcharge, and those changes make them money whatever diesel does. So the fair question is: are carriers Weaseling and Running on Diesel, or just Running up the bill?

This guide covers what a fuel surcharge is, how carriers calculate it, why it is so high going into the 2026 holidays, how much of it is really fuel, and what you can do to pay less. If you just want the money-saving list, it’s near the end.

What is a Fuel Surcharge (FSC)?

A fuel surcharge is an extra charge carriers add on top of the base shipping rate to cover the changing cost of diesel or jet fuel.

Carriers sign rate agreements months or years ahead, but fuel prices change every week. The surcharge is supposed to be the pressure valve. When fuel goes up the surcharge goes up, and when fuel goes down it is supposed to come down too. Ground services are usually tied to the weekly on-highway diesel average published by the U.S. Energy Information Administration, and air and express services to a jet fuel price.

It is called a fuel surcharge everywhere, but it looks a little different depending on how your freight moves:

How is a Fuel Surcharge calculated?

Parcel carriers look up the weekly fuel price in a table and apply that percentage to your base rate. Truckload carriers usually charge per mile.

Parcel and LTL. DHL, UPS and FedEx all publish fuel surcharge tables. Each row is a band of fuel prices, and each band has a percentage. Every week the carrier takes the government’s average price, finds the band it falls in, and that percentage goes on your shipments for the week. A $40 base rate at a 29% surcharge is $11.60 more, before any other fees.

The carrier writes that table. If it shifts the bands or raises the percentage on each band, your surcharge goes up even when the price at the pump hasn’t moved a penny. Remember that when we get to who profits.

Truckload. Full truckload contracts usually use a per-mile formula:

• Take this week’s national diesel average.
• Subtract the base fuel price written in your contract.
• Divide by the miles per gallon the contract assumes for the truck.
• Multiply by the miles on the load.

Say your contract uses a $1.25 base price and 6 miles per gallon, and diesel is $6.28. That’s ($6.28 minus $1.25) divided by 6, or about 84 cents a mile. On a 500-mile load the fuel surcharge comes to about $419. Those base and mileage numbers are only an example; yours are in your contract, and they’re worth reading. A lower base price or a lower assumed mpg both mean a bigger surcharge.

One more thing to check on any invoice: what the percentage is applied to. On some agreements the fuel percentage also lands on certain extra charges, not just the base freight. Your rate terms will say.

Why is the Fuel Surcharge so high right now?

Diesel averaged $6.28 a gallon on October 19, 2026, up 65% since February 28. At that price UPS’s surcharge is 29.5% and FedEx’s is 29%.

Those figures come from a Reuters report published on Newsmax on October 26, using the EIA’s weekly diesel average and the carriers’ own surcharge tables. Diesel has climbed since the U.S. and Israel struck Iran on February 28, and anyone who has watched the Middle East as long as I have knows how fast that shows up on a freight bill.

Then the holidays pile on. Package volume can double in the fourth quarter, and carriers add peak-season demand charges on top of fuel. The TD Cowen/AFS Freight Index for Q4 2026 (Reuters says it draws on anonymized data from about 1,800 shippers) projects:

• Ground parcel pricing up 5.8% from the same quarter last year, a record high.
• Express parcel pricing up 13.8%, a record for the fifth quarter in a row.
• 2026 as the most expensive year for parcel shipping on record.

We wrote about this pattern back in 2020 in A Peek at Peak Season Surcharges, and in 2022 when Russia invaded Ukraine in Lock, Stock and Over the Barrel.

Are Fuel Surcharges a profit center for carriers? Take a guess !

Increasingly, yes. TD Cowen and AFS found that 72% of the parcel fuel surcharge increase since 2021 came from carriers changing their tables, not from fuel prices.

In the first quarter of 2021, diesel averaged $2.91 a gallon and the parcel fuel surcharge in the AFS index was 7.75%. By September 2026, with diesel peaking at $6.53, it was 30%. That’s a jump of 22.25 points, and according to the index, 72% of it came from carriers adjusting their surcharge tables. Only the rest was the price at the pump.

If diesel went back to $2.91 tomorrow, today’s tables would still charge you about 23.75%. That’s roughly three times what you paid at the same fuel price in 2021.

Mingshu Bates, chief analytics officer at AFS Logistics, put it plainly: the fuel surcharge “has become a revenue lever for carriers.” She also expects it to stay high even if crude oil settles down. In my business we call that rockets and feathers. Surcharges go up like a rocket and come down like a feather, if they come down at all.

UPS told Reuters its pricing reflects its premium service and its investments in infrastructure. Running a network that size costs real money, and fuel is one of its biggest costs. Still, a surcharge that triples at the same fuel price is covering more than fuel, so it deserves the same attention you give the base rate.

And fuel isn’t the only quiet change. In the same index, AFS points out that the next FedEx general rate increase moves 2,533 ZIP codes from the extended delivery area surcharge to the remote tier. For packages going to those ZIP codes, that fee jumps to $17.75 when the increase takes effect on January 4, 2027. Read the fine print, folks.

Do USPS, Amazon and regional carriers charge fuel surcharges too?

Yes. USPS added its first fuel surcharge, 8%, in April 2026. Amazon added 3.5% to seller fees. Some regional carriers charge almost as much as UPS.

• The Postal Service’s first-ever fuel surcharge adds 8% to Priority Mail Express, Priority Mail, Ground Advantage and Parcel Select from April 26, 2026 through January 17, 2027. Letters are not included.
• Amazon added a 3.5% fuel and logistics surcharge to Fulfillment by Amazon fees, averaging about 17 cents a unit. Amazon calls it temporary. It also added a 5% fuel and inflation surcharge back in 2022.
• Among regional carriers, OnTrac’s West Coast fuel surcharge was 29.5% for the week ending October 25, according to its published surcharge table, right in line with UPS.

Fast-growing delivery companies such as OnTrac, GoFo, UniUni, Jitsu and Veho now reach about 70% of the U.S. population, and shippers are trying them to cut costs. Switching can save money, but it has a downside. Split your volume between too many carriers and you can lose the volume discounts you had with each one. And holiday shipping plans are set months ahead, so a late switch is hard to pull off.

Can you avoid or negotiate a fuel surcharge?

You can rarely avoid one, but you can pay less by shipping with DGL Logistics. We negotiate the rates, and save you time money and reduce your frustration by hangling all the customs documents.

Here is what I tell our customers:

1. Negotiate the fuel surcharge, not just the base rate. Big retailers do. Jess Dankert of the Retail Industry Leaders Association says fuel surcharges are part of their contract talks with carriers. Ask for a discount off the published surcharge, a cap, or a fixed table for the length of the agreement.
2. Shrink what the percentage is applied to. A 29% surcharge on a smaller base rate is a smaller surcharge. Right-size your boxes so you aren’t paying for air (see Dim Wit or DIM Weight), and combine orders through packaging and consolidation so you ship fewer, fuller loads.
3. Don’t pay express prices for ground timelines. Express pricing is rising more than twice as fast as ground this quarter. If it doesn’t need to be there tomorrow, don’t pay for tomorrow.
4. Move pallets as LTL, not as a pile of parcels. Several heavy boxes going to one address are often cheaper on a pallet through domestic shipping and LTL than as separate parcels, each carrying its own surcharge.
5. Audit your invoices. Check that the percentage on each shipment matches the carrier’s published table for the week it shipped, and that it was applied only to the charges your agreement allows.
6. Compare all-in quotes. A low base rate with a high surcharge can cost more than a higher base rate with a lower one. Ask every carrier or forwarder for the total, fuel included.

Will Fuel Surcharges Go Down?

Not by much, and not soon. Diesel supplies are tight, and because carriers rewrote their tables, surcharges stay high even when fuel prices fall.

Andy Dyer, CEO of AFS Logistics, expects fuel to keep transportation costs high for the foreseeable future. Inventories are low and refineries are running at capacity, so even if crude oil drops, diesel and jet fuel supplies still have to catch up before prices come down. And as we just saw, even a big drop in diesel only takes the parcel surcharge back to about 23.75%, not the 7.75% of 2021.

And this too shall pass, as the saying goes. Someday the war and its uncertaintly it brings will end and diesel will come down.

How to get a Freight Quote that shows the real fuel cost?

We provide an all-in quote with the Fuel Surcharge broken out. Simply, send us the weights, dimensions, values for insurance customs, along with full origin and destination addresses. We’ll quote you so there are no surprises later.

Have this ready and you’ll get a faster, more accurate quote from anyone, including us:

• What you’re shipping, and how many pieces or pallets
• Weight and dimensions per piece, since carriers bill on dimensional weight as well as actual weight
• The pickup and delivery addresses, and whether either one is residential or needs a liftgate
• How fast it needs to get there, so you only pay for the speed you need
• How often you ship, because steady volume is what gets you better rates and surcharge terms

DGL Logistics has shipped to and from 220+ countries since 1991. As a Logistics Provider, we work for you. We pass along our discounted commercial rates. We compare the total cost, fuel included, before we book. Depending on the job, that looks like:

Moving pallets and parcels across the US and Canada through domestic shipping and LTL, or freight overseas through international shipping.

• Cutting the number of shipments, and the surcharges that ride on each one, with packaging and consolidation.
• Reviewing your carrier rates, surcharges and shipping patterns through logistics consulting.
• Exporting and Importing on the proper Incoterms, which we covered in our guide to DDP shipping.

We are dependable, experienced MBE and CBI certified. In 2021, DGL Logistics was recognized with the NC Governor’s Top Export Service Provider Award.

Do you want to know what you’re really paying for fuel?

Send us the details, email [email protected] or call +1 (704) 264-1234, and you’ll get a real person on the line.

The holidays are coming. Spend the time with your family, and let us worry about the shipping and surcharges!

Fuel Surcharge FAQ