When fuel prices come down, the surcharge becomes a loss. It’s a margin killer that’s difficult to get rid of without a customer revolt. It’s time to eliminate the fuel surcharge. To do that, you’re going to have to find and fix your inefficiencies.
Fuel surcharges only protect you from one variable
A fuel surcharge is in place to protect your margin from a price you can’t control. That’s a fair use case. Diesel prices fluctuate based on aspects that have nothing to do with your business, and most shippers understand that FSCs are just part of the deal.
But here’s what an FSC won’t do for you. It won’t burn less fuel for you. It won’t make a trip shorter, cut a deadhead leg, or manage your drivers’ HOS differently. It’s a pass-through, not a solution. If you’re driving empty 25% of the time, a surcharge just means you’re getting paid for wasting fuel. You’re still doing it.
For perspective, the American Transportation Research Institute has indicated that average operating margins for for-hire truckload carriers seldom rise above 6%. When you’re working on margins that small, a 2% swing in efficiency is as important as a 2% swing in revenue – and a lot easier to achieve. Fuel prices are gonna fluctuate. Your empty miles don’t have to.
More data doesn’t automatically mean better decisions
Here’s the part nobody wants to say out loud: piling on more telematics feeds, more pings, and more real-time alerts can actually make dispatch decisions worse, not better.
Dispatchers today are staring at dashboards throwing off dozens of signals a minute – fuel burn, idle time, geofence alerts, ETA drift, driver hours. When everything is flagged as urgent, nothing actually is. The result is a kind of decision fatigue where dispatchers start reacting to whatever’s loudest on the screen instead of what actually matters for the week’s route plan. That’s how you end up rerouting a driver to save eight minutes on one load while ignoring a pattern of deadhead miles that’s costing you thousands a month.
Raw data isn’t intelligence. It’s just noise until someone or something filters it.
A system of record turns noise into a plan
This is where a lot of operations get stuck. They’ve got the telematics, the GPS pings, the fuel cards all feeding data somewhere – but no single layer translating that into a coherent plan. Everything stays fragmented, and fragmented data pushes dispatchers toward short-term, reactive calls instead of decisions that support the network long-term.
A TMS functions as the network’s brain, translating fragmented data streams into a coordinated dispatch plan. Instead of a dispatcher manually cross-referencing five screens under time pressure, the system surfaces what’s already been filtered against route history, lane density, and cost per mile. That’s the difference between staring at data and actually using it.
Without that layer, you’re not managing a fleet. You’re managing a fire drill.
The real savings are in empty miles, not the pump price
Deadhead miles are the black hole of fuel money. Every mile you drive without a paying load still guzzles gas, still grinds down your truck, still uses up driver hours – and generates zero revenue. A carrier can slap 25% on top of all its rates as a fuel surcharge and still hemorrhage red ink if one-third of its miles are driven empty.
Cutting deadhead is a structural, not a pricing, solution. It comes from carefully engineering your network – matching outbound and inbound lanes, concentrating lane density with shippers whose freight lanes play well with your lanes, and ordering multi-stop deliveries in such a way that your truck isn’t driving back past drop one when you’re headed to drop two. This takes planning. It also happens to be something that comes in the nice big basket labeled “efficiency” that both carriers and shippers can push for in a rate negotiation.
And it has environmental, or “sustainability,” implications as well – fewer empty miles equals fewer emissions per load, which increasingly appears on the scorecards shippers use to evaluate carriers.
Total cost per mile beats fuel price as your north star
The price of fuel is one component of many that determine costs. In the end, it’s the sum of all these costs – fuel, maintenance, driver compensation, insurance (and many other factors) – that determine a lane’s viability. If a carrier focuses solely on the cost of fuel, they may find themselves working a lane they see as cheap but is actually one of the most expensive in their network when they factor in all other expenses, such as low route density, maintenance of traffic, and excessive idle time.
Build a decision hierarchy, not a data firehose
The solution is not to reduce the amount of data. The key is to organize how data is used. Strategic decisions related to your network such as lane design, consolidation, and capacity planning, should be based on a monthly or quarterly cadence and measured against KPIs including but not limited to cost per mile and deadhead. Meanwhile, dispatch decisions should be based on a minute-by-minute cadence, using a limited and filtered set of data focused on what can be acted upon immediately.
By keeping data utilization in these 2 different buckets, you can ensure network-level decisions are not compromised by making dispatch-level decisions under time constraints.
Fuel surcharges will continue to do what they were designed for: protect your margins against fluctuations you can’t manage. However, the operators whose operating ratio improves are those who explicitly address what’s manageable and under their control: empty miles, route density, and how data is transformed into decisions as opposed to using it to justify them.
