The Strategic Shift from DOE Fuel Surcharges to Market-Based Reimbursements

Are you managing your third-party fuel spend at a shipment-level that reflects where your network moves each day? For many shippers, the answer is no. Traditional fuel surcharge schedules, commonly based on the U.S. Department of Energy (DOE) diesel fuel price index, often lead to inaccurate payments. This reliance on a weekly, national average price creates a significant gap between what you pay and the actual cost carriers pay for fuel. With diesel fuel price volatility posing a constant threat to budgets, the inaccuracy of a DOE fuel surcharge is a risk you can no longer afford. 

This guide will explain the limitations of the DOE fuel surcharge model, and explore modern, market-based alternatives that deliver precision and transparency. By moving beyond averages, you can optimize your fuel management program and gain control over your second-largest transportation expense. 

Key takeaways 

• The DOE fuel surcharge is an outdated method for calculating fuel reimbursements. It relies on a weekly national average, ignoring real-time, lane-specific fuel costs. 

• This outdated model can lead to inaccurate reimbursements, either overpaying or underpaying carriers, which can strain carrier relationships and create unfair partnerships. 

• Market-based fuel reimbursement strategies, like Breakthrough's Fuel Recovery solution, offer a more accurate alternative by using real-time, route-specific data for calculations. 

• Modernizing your fuel reimbursement strategy is essential for cost transparency, improving carrier relationships, and gaining visibility into emissions. 

Understanding DOE fuel surcharges 

A DOE fuel surcharge is a component of freight contracts to reimburse carriers for the cost of fuel. This surcharge is typically calculated using a formula tied to the weekly DOE diesel fuel price index. This practice dates to the 1970s and has persisted due to industry inertia. However, as diesel fuel prices become more volatile due to geopolitical tensions, this legacy approach no longer reflects the true cost of fuel on a given lane, creating inaccuracies that impact a shipper's bottom line. 

Despite more accurate methods on the market, only 39% of shippers currently use a market-based fuel reimbursement model, according to Breakthrough's 2025 State of Transportation Report. This gap highlights a major opportunity for shippers to improve cost accuracy, enhance carrier partnerships, and gain a competitive edge. 

Why do DOE fuel surcharges fall short? 

While the DOE index provides a convenient benchmark, it fails to capture the true fuel cost and consumption for any individual freight movement. This discrepancy introduces significant inaccuracies that can negatively impact your bottom line and carrier relationships. 

National average vs. lane-specific reality 

The most significant flaw of the DOE index is that it is a national average. It completely ignores the real-world variables that determine the price a carrier pays at the pump. Factors like state taxes and lane-level supply and demand can cause major price differences from one lane to another. A market-based approach, on the other hand, accounts for the unique elements of every freight movement. For example, when considering taxes alone, this data can vary by nearly $1.00 ($0.9955 cents) per gallon from state to state.  

Lag and real-time price volatility 

The DOE index is published only once a week. In a volatile market, like when Iran launched missile strikes on the U.S. Al-Udeid military base in Qatar, fuel prices can swing dramatically from one day to the next. A weekly average means your surcharge schedule is always a step behind, failing to reflect the actual prices paid on the day of transit. This time lag creates a consistent distortion, leading to payments disconnected from real-time market conditions. 

Over- or under-reimbursement risks 

Relying on the DOE fuel price index for your daily freight movements means that on any given day, either the shipper or the carrier is benefiting unfairly. When the index price is higher than the actual pump price, the shipper overpays. When it's lower, the carrier is under-reimbursed, which can strain relationships. Additionally, carriers often receive volume discounts at the pump, which means the DOE index price doesn’t reflect their true fuel cost, further complicating a clear, pass-through expense. This lack of precision prevents a fair and transparent partnership. 

Future trends of fuel surcharges 

The transportation industry is evolving, and so are the expectations around fuel management. As companies increasingly focus on cost control and sustainability, the need for precise data has never been greater. The rise of alternative energies like renewable diesel, renewable natural gas (RNG), and electric vehicles adds another layer of complexity to fuel surcharges that index-based models are not equipped to handle. 

Furthermore, finance teams are taking on a more strategic role within their organizations. According to a Deloitte report, 57% of surveyed finance leaders are among the top influencers of corporate strategy. These leaders are researching solutions to cut costs and improve the accuracy of their fuel forecasts, enabling more precise budgeting. 

An expert approach to fuel surcharges and reimbursement 

The most effective way to address the shortcomings of the DOE fuel surcharge is to adopt a market-based approach. Breakthrough’s Fuel Recovery solution moves beyond national averages to calculate reimbursements based on the true cost of fuel for each individual shipment. 

Our methodology incorporates four core components: 

• Time: The exact date the freight moved.

• Tax: The specific taxes applied to the fuel.

• Geography: The actual route the truck traveled.

• Price: The wholesale cost of fuel along that route. 

This data-driven approach ensures that carriers are reimbursed fairly and accurately for the fuel they consume, building trust and strengthening partnerships. When combined with strategies like zero-base rate and hedging, this model empowers shippers to take full control of their transportation fuel spend. 

Looking to modernize your fuel surcharge strategy? 

Relying on an outdated DOE fuel surcharge model exposes your budget to volatility and inaccuracy. Re-evaluating your approach is a critical step toward building a more resilient and efficient supply chain. 

When choosing a strategic fuel management partner, look for a provider that offers: 

• Lane-level accuracy for precise calculations. 

• Seamless integration with your existing processes. 

• Real-time adjustments for tax and fuel price changes. 

• Scope 1 and 3 transportation emission tracking to establish your baseline and drive progress toward your sustainability goals. 

By moving to a market-based fuel reimbursement program, you can eliminate distortion, foster stronger carrier relationships, and unlock continuous improvement opportunities. Discover how Fuel Recovery can advance your operations today! 

DOE fuel surcharge FAQs 

What is a DOE fuel surcharge and how does it work? 

A DOE fuel surcharge is a fee paid to a freight carrier to cover the fluctuating cost of fuel. It is typically calculated using the weekly national average diesel price published by the DOE. Shippers and carriers agree on a baseline fuel price, and the surcharge adjusts freight payments up or down as the DOE index moves above that baseline. This method is widely used for its simplicity but lacks accuracy. 

What are the limitations of using the DOE index for fuel reimbursement? 

The primary limitations of the DOE index are its lack of real-time data and its geographic inaccuracy. As a weekly national average, it also fails to account for daily price volatility and significant fuel price differences caused by taxes. This often results in shippers either overpaying or underpaying their carriers, creating unfair and inaccurate partnerships. 

Is there a more accurate alternative to DOE fuel surcharges? 

Yes, market-based fuel reimbursement is a more accurate alternative. Solutions like Breakthrough’s Fuel Recovery solution calculate fuel costs based on the time, price, tax, and geography for each shipment. This method eliminates the distortions of a national average and ensures fuel is a pass-through expense. 

How can shippers avoid overpaying using index-based fuel models? 

To avoid overpaying, shippers should transition from an index-based model to a market-based fuel reimbursement program. This removes reliance on the national average and ties fuel reimbursement directly to the actual cost of fuel for each specific shipment. This data-driven approach provides complete transparency, eliminates the risk of overpayment, and gives shippers precise control over their fuel spend. 

Do modern fuel strategies still use the DOE index in any way? 

While some modern strategies may reference the DOE index for high-level benchmarking, they do not use it for actual reimbursement calculations. Advanced fuel management programs have moved entirely to market-based data, as it provides the accuracy and transparency needed for effective cost control and fair carrier compensation. The DOE index is considered a legacy tool, not a component of a forward-thinking fuel management strategy.