Gas Prices and Your Bottom Line: Fuel Surcharge Strategies

In January 2022, the national average for diesel was around $3.60 per gallon. By June, it blew past $5.70. That's not a blip — that's a 58% increase that hit moving companies right in the middle of their busiest season.

For a 10-truck fleet averaging 8 miles per gallon and running 150 miles per day per truck during peak season, the daily fuel cost difference between January and June pricing was roughly $400 across the fleet. That's $12,000 per month evaporating from the bottom line without a single other expense changing.

If you didn't have a fuel surcharge strategy in 2022, you felt it. Here's how to build one that protects your margins without driving customers away.

What Is a Fuel Surcharge?

A fuel surcharge is a separate, variable line item on your invoice that adjusts based on current fuel prices. Instead of baking fuel costs into your hourly rate (where increases are invisible and permanent), you break it out so it can flex with the market.

This isn't a moving industry invention. Trucking, shipping, and freight companies have used fuel surcharges for decades. FedEx and UPS adjust their surcharges weekly based on the DOE's national average diesel price. Movers are simply adopting a proven practice.

How Do You Calculate It?

There are two common approaches:

Percentage-Based Surcharge

Pick a baseline fuel price — say $3.50/gallon, which was roughly the pre-spike average. When the actual price exceeds the baseline, calculate the percentage increase and apply a proportional surcharge to the move.

Example:

• Baseline: $3.50/gal
• Current: $5.25/gal
• Increase: 50%
• Fuel typically represents ~8% of a local move's total cost
• Surcharge: 50% × 8% = 4% surcharge on the total move price

On a $2,000 local move, that's an $80 surcharge. Not nothing, but reasonable — and far better than eating $80 per job out of your margin.

Per-Mile Surcharge

More precise but slightly more complex. Calculate your per-mile fuel cost at the baseline and current price, then charge the difference per estimated mile.

Example:

• Truck gets 8 MPG
• Baseline fuel cost per mile: $3.50 ÷ 8 = $0.44
• Current fuel cost per mile: $5.25 ÷ 8 = $0.66
• Surcharge per mile: $0.22
• On a 50-mile local move: $11 surcharge
• On a 500-mile long-distance move: $110 surcharge

The per-mile approach is fairer for customers because it scales with actual distance, but it requires you to estimate mileage accurately.

How Do You Communicate It Without Losing the Job?

This is where most companies stumble. They either apologize profusely (which makes it seem negotiable) or bury it in fine print (which makes customers feel tricked). Neither works.

The right approach is direct and factual:

On the estimate: List the fuel surcharge as a separate line item with a brief explanation: "Fuel surcharge (based on current diesel prices, adjusted monthly): $XX." Don't hide it. Don't combine it with another line item.

If asked about it: "We break out fuel as a separate charge so you can see exactly what you're paying for. When gas prices come down, this charge comes down with it. Most companies just raised their rates permanently — we'd rather be transparent."

That last line matters. It reframes the surcharge from "extra cost" to "honest pricing." Customers respect it more than you'd expect, because they're also paying more at their own gas station and understand the reality.

Timeliness of Updates

Update your surcharge monthly or quarterly based on the DOE's published national average. More frequent than monthly creates confusion. Less frequent than quarterly means you're eating costs during rapid spikes.

Publish your current surcharge rate on your website and reference it in your terms and conditions. If a customer gets an estimate in May and the surcharge changes before their June move, they should know in advance.

What About Long-Distance and Interstate Moves?

For interstate moves, fuel surcharges must comply with your tariff filing. If you're registered with the FMCSA as a household goods carrier, your tariff defines how you calculate charges. You can't just add an arbitrary surcharge without updating your tariff.

Most tariff structures allow for fuel surcharges indexed to published fuel prices. If yours doesn't, update it. The process is straightforward — you file a revised tariff with the surcharge methodology and it takes effect after the required notice period (usually 30 days for increases, 1 day for decreases).

State PUC regulations vary. Some states allow fuel surcharges with minimal disclosure requirements. Others require specific filing or pre-approval. Check your state's rules before implementing.

Beyond Surcharges: Other Fuel Cost Strategies

A surcharge recovers cost. These strategies reduce it.

Route Optimization

Your dispatch software should factor in distance when assigning crews to jobs. A crew driving 45 minutes across town to a job when another crew is 10 minutes away wastes fuel, time, and money. During the 2022 spike, even 15 minutes of unnecessary driving per job cost $3–5 in fuel — which adds up fast across a busy schedule.

Idle Reduction

Moving trucks idle. A lot. At job sites, at gas stations, during lunch breaks. A diesel truck idling burns roughly 0.8 gallons per hour. At $5.50/gallon, that's $4.40/hour in pure waste.

Train crews to shut off the engine when they're going to be stationary for more than 2 minutes. Some companies install idle-shutdown systems, but crew discipline is the cheaper and faster fix.

Fleet Maintenance

A poorly maintained engine burns more fuel. Underinflated tires burn more fuel. A dirty air filter burns more fuel. Stay on top of preventive maintenance schedules — a 5% improvement in fuel efficiency across a 10-truck fleet saves hundreds of dollars per month at current prices.

Consolidation

For long-distance moves, consolidating multiple shipments onto one truck instead of running half-empty loads cuts per-shipment fuel costs significantly. This requires coordination and planning that's difficult without proper reporting and dispatch visibility, but the savings are real.

When Should You Remove the Surcharge?

When fuel prices drop back to your baseline level. This is what makes a surcharge different from a rate increase — it's temporary by design.

Removing the surcharge when prices normalize builds credibility. It proves that the surcharge was honest, not a margin grab. Customers notice, and it reinforces trust.

Set a quarterly review: if the current DOE average is within 10% of your baseline, drop the surcharge. If prices spike again, reinstate it. The mechanism should be automatic and transparent, not arbitrary.

The Bottom Line

Fuel is a cost you can't control but absolutely can manage. A well-structured surcharge protects your margins without permanently inflating your rates. Pair it with operational efficiencies — smarter routing, reduced idle time, better fleet maintenance — and you'll survive gas price volatility better than competitors who just complain about it.

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