Parcel fuel surcharges reached 30% of the base transportation rate in September, up from 7.75% in the first quarter of 2021, according to the TD Cowen/AFS Freight Index. Diesel hit a record $6.53 a gallon in September, compared with $2.91 in early 2021.
But higher fuel prices explain only part of the increase. Changes to carriers’ surcharge tables accounted for 72% of the 22.25-percentage-point rise, the report found. Even if diesel returned to $2.91, the surcharge would still be 23.75%.
“The fuel surcharge has become a revenue lever for carriers in addition to a pass-through mechanism,” said Mingshu Bates, AFS Logistics’ chief analytics officer.
Ground parcel rates per package are forecast to hit a record 43.3% above January 2018 levels in the fourth quarter, up 5.8% year over year. Express parcel rates are projected at a record 20.3% above the same baseline, up 13.8% year over year.
In LTL shipping, where fuel surcharges closely track diesel prices, surcharges were 79% higher year over year in September. The index projects fourth-quarter LTL rates will reach 82.5% above January 2018 levels, while truckload rates will be 23.4% higher.
Fuel costs are also rising again. Diesel averaged $6.18 a gallon in the week of Oct. 12, up 69% from a year earlier, according to the Energy Information Administration.
