A fuel surcharge is an additional transportation fee used to offset changes in fuel costs beyond the base freight rate. Carriers apply fuel surcharges in trucking, parcel delivery, ocean freight, air cargo, and courier services when fuel prices rise or fluctuate. The surcharge may be calculated as a percentage of the freight charge, a per-mile fee, or a formula tied to a fuel price index. For shippers, it is an important cost to include when comparing quotes and calculating landed cost.
Types of Fuel Surcharges by Mode
- Ocean freight: BAF (Bunker Adjustment Factor) and EBS (Emergency Bunker Surcharge)
- Air freight: fuel surcharge calculated per kg
- Trucking: percentage added to the base line-haul rate, recalculated weekly based on DOE fuel index
Fuel surcharges are a standard, unavoidable cost of freight. Include them in all landed cost models.
Related terms: Accessorial Charges.
