Market Matters Blog           04/06 10:06

   While High Gasoline Prices Hurt Consumers, Don't Overlook Fuel Surcharges

   Almost every company who relies on any form of transportation to do business 
has been charging higher fuel charges due to high diesel prices.

Mary Kennedy
DTN Basis Analyst

   High gasoline and diesel fuel prices are hurting consumers, farmers and 
shippers. On top of that, the higher diesel prices are causing railroads, barge 
lines, truckers, airlines and delivery services like UPS and FedEx to increase 
fuel surcharges as the price of diesel continues to move higher, thanks in part 
to the surge in crude oil prices. Read more at "Diesel fuel explained" from 
U.S. Energy Information Administration (EIA): 
https://www.eia.gov/energyexplained/diesel-fuel/factors-affecting-diesel-prices.
php.

   What does this mean? It means the higher fuel surcharge will trickle down to 
the U.S. consumer. Think of it as an increase in freight costs, for instance, 
rail rates. When rail tariff rates rise and/or secondary rail freight becomes 
expensive to buy, those costs are passed on to shippers and in turn normally to 
farmers via the basis posted at the elevator. Now, with the extra burden of an 
increase in the fuel surcharge, that will cost shippers more to move grain 
and/or other commodities shipped by rail.

   As an example, here is the Norfolk Southern (NS) updated fuel surcharge and 
how they arrived at the price. Note the surcharge is tied to the national 
average price of on-highway diesel (OHD) fuel. On their website, NS says, "The 
fuel surcharge is applied to each shipment having a bill of lading dated on or 
after the 1st day of the second calendar month following the calendar month of 
a given OHD Average Price calculation. Mileage-Based (or 'On Highway') rates, 
including for our Industrial Products $2.50 Mileage-Based Program, are based on 
the average price of diesel for motor vehicles (plus tax) during the previous 
month."

   As of March 1, 2026, according to their website, the NS surcharge amount was 
$0.26 against the average monthly OHD of $3.523, based on the month of January 
2026. As of April 1, 2026, the NS surcharge amount is $0.31 against the average 
monthly OHD of $3.722 based on the month of February 2026. As of May 1, 2026, 
the NS surcharge amount will be $0.61 against the average monthly OHD of 
$4.921, based on the month of March 2026. Here is more information on the NS 
website: 
https://www.norfolksouthern.com/en/ship-by-rail/shipping-tools/terms-conditions/
fuel-surcharges.

   On March 25, 2026, the United States Postal Service, in a national press 
release, said it filed notice with the Postal Regulatory Commission (PRC) 
regarding a "time-limited price change" to better align its costs of 
transportation with the market. "The planned price change, which was approved 
by the Governors of the Postal Service on March 24, is an 8 percent increase 
that would affect base postage prices on the following retail and commercial 
domestic competitive products: Priority Mail Express, Priority Mail, USPS 
Ground Advantage, and Parcel Select. No other products or services would be 
affected, including First-Class Stamps. Pending favorable review by the PRC, 
the price change would go into effect at midnight Central Time on April 26 and 
would remain in place until midnight Central Time on Jan. 17, 2027. At that 
time, the Postal Service can determine if a different long-term approach is 
needed." Link to the entire press release: 
https://about.usps.com/newsroom/national-releases/2026/0325-usps-announces-trans
portation-related-time-limited-price-change.htm.

   The bottom line is there are many more businesses that rely on any form of 
transportation, and it is likely they will impose a higher fuel surcharge until 
the U.S. and Israel-Iran conflict ends, and maybe beyond. Some businesses will 
adjust them weekly; others, like the railroad for instance, are monthly. Here 
is a link to a good article on April 3, 2026, covering almost all of the 
businesses that so far have increased their fuel surcharges: 
https://spectrumlocalnews.com/us/snplus/business/2026/04/03/high-fuel-prices-fee
s-surcharges.

   Mary Kennedy can be reached at mary.kennedy@dtn.com

   Follow her on social platform X @MaryCKenn




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