Fuel Price Volatility | The Role of Fair Diesel Fuel Surcharge Programs

The transportation sector is once again facing significant pressure as diesel prices surge across North America. This sudden increase, driven largely by geopolitical tension and supply disruptions, has placed the trucking industry in a challenging position, with operating costs rising sharply and margins being compressed at an unprecedented pace.

Recent data published by major Fuel price indexes shows a rapid climb in diesel prices. Both the Freight Carrier Association of Canada (FCA) and the US Energy Information Administration’s most recent Fuel Price update highlight an approximately 25% increase in fuel prices week over week. The FCA published that the Canadian fuel price index surged from under $1.50/litre to $1.85/litre (Canadian dollars), and the US National diesel fuel price climbed from $3.897/gallon to $4.859/gallon (US dollars).

Much of the volatility stems from disrupted oil shipments through the Strait of Hormuz amid military conflict in the Middle East. While it is usually unwise to predict oil prices, many industry reports warn that this instability is expected to continue well into Q2, meaning the higher, volatile fuel costs are not temporary and businesses across the supply chain must prepare for sustained volatility.

Why This Matters for Shippers and Carriers Alike

Fuel is one of the single largest operating expenses for trucking companies. Even modest increases in the price per gallon can meaningfully impact operating costs. A 25% increase is extremely disruptive to carriers’ ability to provide sustainable and reliable service.

Smaller fleets, regional carriers, and specialized operators such as refrigerated carriers, whose equipment must run continuously, are feeling the impact even more severely as their fuel burn cannot be reduced without compromising service quality

Diesel Fuel Surcharge Programs: A Fair and Transparent Solution

However, because the surcharges are based on a Fuel price index from the previous period, it often lags behind real‑time fuel price increases, especially during sudden spikes. That lag places additional strain on carriers already managing thin margins amid a soft freight market.

Why Collaboration Matters Now More Than Ever

The current environment underscores a simple truth: rising fuel costs affect everyone. From grocery prices to construction materials, transportation is the backbone of the economy. When diesel costs spike, the impact cascades through all sectors of commerce.

Many shippers already recognize the value of maintaining strong carrier relationships, and diesel fuel surcharge programs are a key part of that partnership. By supporting fair and timely FSC adjustments, shippers help carriers continue to deliver consistent, dependable service, even amid global uncertainty.

As a trucking carrier, we are committed to maintaining service quality, reliability, and operational excellence. But doing so in today’s environment requires a collaborative approach, one that acknowledges the realities of the fuel market and the need for mechanisms that help both sides navigate volatility.

We encourage our shipping partners to:

• Review and update diesel fuel surcharge agreements regularly
• Ensure diesel fuel surcharge structures accurately reflect market fuel prices
• Engage in open dialogue around cost‑sharing during volatile periods
• Consider long‑term partnerships that prioritize operational sustainability

The challenges facing our industry are real, but with transparent fuel surcharge programs and strong shipper‑carrier collaboration, we can continue moving freight efficiently while keeping supply chains resilient.

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