Gas just hit $4.56 a gallon. Diesel is sitting at $5.60. And if you manage freight, you already know what that means for your invoices: fuel surcharges are eating your budget alive. With the Strait of Hormuz disruption still choking roughly 20% of global oil supply and GasBuddy projecting a $4.80 summer gas average between Memorial Day and Labor Day, the outlook for the next few months is not getting friendlier. Major LTL carriers are now applying fuel surcharges above 40% of linehaul charges, up from roughly 26% at this time last year. For many shippers, fuel surcharges have become the single largest variable cost on every freight invoice.

You already understand the problem. This post is about what to do about it.

How Big Is the Fuel Surcharge Problem Right Now?

Fuel surcharges exist to let carriers pass fluctuating diesel costs through to shippers. The mechanism is straightforward: as the DOE's weekly national diesel average rises, the surcharge percentage (or cents-per-mile rate) climbs with it. In a stable fuel environment, surcharges are a manageable line item. In the current environment, they are anything but.

Here is where things stand as of May 2026:

• The national on-highway diesel average is $5.60 per gallon, up more than $2.00 from a year ago.
• The EIA projects diesel will average $5.36 per gallon in Q2 2026.
• LTL fuel surcharges have jumped from the mid-20s to above 40% of linehaul in under 12 months.
• For FTL shippers, per-mile surcharges are running $0.42 to $0.55 on standard equipment, and $0.55 to $0.68 for reefer.
• In some cases, fuel surcharges now represent 40 to 50% of the total freight invoice.

The driver behind these numbers is well documented: the conflict in the Middle East and the effective closure of the Strait of Hormuz since early March 2026 removed a massive share of global oil supply from the market almost overnight. Brent crude spiked roughly 65% in a single month. And because carrier fuel surcharge tables are indexed to diesel prices, every penny at the pump flows directly into your freight bills, often within a week or two.

The shippers who come through this period in the best shape will not be the ones who simply absorb the hit. They will be the ones who use this moment to rethink how they plan, price, and execute shipments.

Strategy 1: Use Mode Optimization to Reduce Fuel Exposure

Not every shipment needs to move on the most fuel-intensive option. A truckload running 1,000 miles burns significantly more diesel per ton-mile than intermodal rail covering the same distance. Rail can move one ton of freight roughly 500 miles on a single gallon of fuel, making it three to four times more fuel-efficient than over-the-road trucking.

That efficiency gap translates directly into surcharge savings. Intermodal fuel surcharges follow a different structure than truckload surcharges and tend to be less volatile. On lanes over 750 miles with decent terminal access, intermodal typically saves 10 to 30% compared to truck-only transport, and the savings widen further when diesel prices are elevated.

The catch is that mode optimization requires evaluating each shipment against multiple options, accounting for transit time flexibility, terminal proximity, and total landed cost. When fuel was cheap, defaulting to FTL on every lane was a forgivable shortcut. At $5.60 diesel, it is an expensive one.

A TMS that evaluates LTL consolidation, FTL, and intermodal side by side on every shipment gives shippers the data to make the right call lane by lane, rather than relying on habits formed when diesel was $3.50.

Where to Start

Look at your top 20 lanes by spend. Identify which ones are over 750 miles and currently moving exclusively by truck. Those are your highest-ROI candidates for an intermodal evaluation. Even shifting 10 to 15% of eligible volume to rail can meaningfully reduce your total fuel surcharge exposure.

Strategy 2: Consolidate Shipments and Optimize Every Load

A truck that is 60% full burns the same diesel as a truck that is 95% full. Every partially loaded trailer is fuel spend wasted on moving air. When diesel was under $4.00, that inefficiency was annoying. At current prices, it is a material budget problem.

Shipment consolidation, combining multiple orders headed to the same region into fewer, fuller loads, is one of the most direct ways to reduce fuel cost per unit shipped. The math is simple: fewer trucks on the road means fewer gallons burned and fewer fuel surcharges on your invoices.

Effective consolidation depends on a few things working together. You need visibility into upcoming orders across customers and destinations. You need product-level data (dimensions, weight, stackability) to know what actually fits on a pallet and in a trailer. And you need the ability to run those calculations quickly enough to act before pickup windows close.

This is where load optimization tools earn their keep. A system that reads your item master catalog and calculates pallet configurations automatically can spot consolidation opportunities that a person working in a spreadsheet would miss, or would find too late to act on. Platforms like Owlery pull product-level dimensions and stackability data directly from the item master to build optimized loads, eliminating the guesswork that leads to half-empty trailers.

The Payoff

One Owlery customer reduced the number of trucks needed per week by 32% through better order consolidation. In a $3.50 diesel environment, that is a nice win. In a $5.60 diesel environment, it is a significant competitive advantage.

Strategy 3: Audit Your Fuel Surcharges Against Actual Benchmarks

Here is a problem that does not get enough attention: many shippers are overpaying on fuel surcharges even relative to current diesel prices, because their surcharge schedules are misaligned with the actual DOE index.

Fuel surcharges are supposed to be calculated against a published benchmark, typically the EIA's weekly national on-highway diesel average. But in practice, the surcharge you pay depends on how your contract defines the calculation. Some contracts use lagging index dates. Some apply surcharges on a broader base than just linehaul. Some have escalation schedules that ratchet up faster than they ratchet down. And some carriers have simply not updated their surcharge tables to reflect current index structures.

The result is that two shippers paying the same carrier on the same lane can pay meaningfully different surcharge amounts, not because of volume or negotiation power, but because one has a cleaner surcharge formula.

What to Look For

Review your carrier contracts for these specific issues:

• Index lag: How many days or weeks after the DOE publishes a diesel price does your surcharge update? A two-week lag can cost you when prices are dropping, and does not help when they are rising.
• Base rate application: Is the surcharge applied only to the linehaul charge, or to the full invoice including accessorials? Surcharges calculated on a broader base inflate the total.
• Floor and ceiling provisions: Does your contract cap the surcharge at a maximum percentage? Does it have a floor that keeps the surcharge elevated even when diesel drops?
• Regional mismatch: The national diesel average masks significant regional variation. West Coast diesel is running above $6.50 per gallon while Gulf Coast diesel is closer to $5.12. If your surcharge formula uses the national average but your freight moves primarily through high-cost regions, you may be subsidizing other shippers.

A freight audit process that validates every invoice against the correct index, for the correct week, applied to the correct base charge, catches overpayments that manual review almost always misses. The industry's freight invoice error rate runs between 3 and 7% in normal times. In a volatile fuel market with surcharges changing weekly, that error rate climbs.

Strategy 4: Benchmark Carriers When Bid Spreads Are Wide

Fuel volatility does not affect every carrier equally. Asset-based carriers with newer, more fuel-efficient fleets absorb diesel spikes differently than carriers running older equipment. Carriers with strong backhaul networks price differently than carriers deadheading home empty. Regional carriers fueling in low-cost PADD districts have a structural advantage over carriers fueling on the West Coast.

The result is that when diesel is volatile, the spread between the highest and lowest carrier bids on any given lane widens. In a stable market, the difference between your best and worst quote might be 5 to 10%. In the current market, that spread can be 20% or more, especially on spot freight.

This makes real-time carrier benchmarking more valuable than it has been in years. Shippers who compare rates across their full carrier network on every shipment, contract rates, spot rates, and LTL tariffs side by side, will consistently find savings that shippers relying on static routing guides or a single preferred carrier will miss.

Why Static Routing Guides Fall Short

A routing guide built six months ago was built in a different fuel environment. The carrier that was your best option on a lane in November may not be your best option today, not because their service changed, but because their fuel economics changed. Carriers with older equipment or inefficient route networks are passing higher per-mile fuel costs through to you. Carriers that have invested in fuel efficiency or that operate in lower-cost fuel regions may now be significantly cheaper on the same lane.

The only way to capture that difference is to query your full network on every shipment. A TMS with multi-carrier rate shopping does this automatically, pulling contract, spot, and tariff rates in a single view so you can make cost-informed decisions without spending hours on the phone or toggling between carrier portals.

What Shippers Should Do This Week

The fuel surcharge environment is not going to improve on its own this summer. The Strait of Hormuz remains disrupted. Refinery capacity is running near its limits. Summer driving season is about to layer consumer gasoline demand on top of already-tight diesel supply. The EIA's full-year 2026 diesel forecast averages $4.76 per gallon, and Q2 is projected at $5.36.

Shippers who take action now, even incremental action, will be better positioned than those who wait for prices to come back down.

Start with the highest-impact move available to you. If you are shipping long-haul freight exclusively by truck, run an intermodal analysis on your top lanes. If your loads are running below 90% capacity, look at your consolidation process. If you have not audited your fuel surcharge formulas this year, pull your contracts and check them against the current DOE index. And if you are still quoting carriers one at a time, get a tool that lets you compare your full network in a single view.

None of these tactics require a massive overhaul. They require visibility into your freight data and the ability to act on what it tells you. That is exactly what a modern TMS is built to provide.