A US trucking company is telling ABC News that long-term freight contracts it signed months ago now force it to eat the gap between locked-in rates and a rising diesel bill. The carrier's position is plain: contractual obligations come first, fuel costs come out of margin.

Why a locked rate becomes a margin problem

When a truckload carrier signs a 6- or 12-month rate agreement with a shipper, the rate is fixed on day one. Diesel does not stay fixed. It can swing 20-30% inside the contract window. A fuel surcharge is supposed to bridge that gap.

Not every contract carries one. And not every surcharge updates on a weekly basis. Some index to a DOE national diesel series. Some peg to a regional EIA number. Some have a cap. Some have a deadband. Some have nothing at all.

The carrier in the ABC News report sits in that last bucket. The math is mechanical. Locked rate. Open fuel exposure. Diesel goes up. Carrier margin goes down.

What does this change for shippers?

In the short term, nothing. The rate is the rate. The contract is the contract. But the carrier's complaint is a leading indicator.

If diesel keeps climbing, expect rate requests at the next RFP. Capacity will reprice. The longer the fuel gap stays open, the louder the conversation at renewal gets. Carriers running multiple locked-in shippers will look for the lane they can exit first.

What does it change for carriers on thin margins?

Everything shifts for carriers on thin margins. Truckload operators typically clear 4-6% net margin. A 50-cent jump in on-highway diesel can wipe that out on a 600-mile run with no surcharge. Owner-operators feel it first. Small fleets fold next.

Mid-sized carriers either renegotiate mid-contract — rare and usually costly — trigger an existing fuel clause, or absorb the hit and run fewer miles on the best-paying freight. None of those options grows the business.

Why trucking differs from ocean and air

The mechanism matters. Ocean carriers pass bunker through BAF clauses that re-price quarterly. Air carriers pass jet fuel through indices that update monthly. Trucking's pass-through is uneven and contract-by-contract.

A large retailer moving 50,000 truckloads a year may run a weekly DOE diesel index with a 5-cent deadband. A mid-market shipper with 200 loads a year may carry a hand-built surcharge updated quarterly. A spot shipper pays spot. The carrier in this report is on the fixed-rate end of the spectrum with no live surcharge.

How does a carrier stop the next contract doing the same thing?

Build a fuel surcharge into every contract. Index it to a published weekly series — the EIA US On-Highway Diesel price is the standard. Set a deadband so small moves don't churn the invoice. Write the trigger so both parties see the math, not argue about it after the fact. Price the rate net of fuel, not gross, so the shipper reads the real cost.

Why is this the shipper's problem before the next bid?

Because the carrier absorbing fuel cost today is the carrier raising rates tomorrow. The contract may look stable. The cost behind it is not. Quiet rate erosion inside a long-term deal usually turns into a steep ask at the next RFP.

A look-ahead: US diesel tracks crude and refinery utilization. If crude holds above recent levels through the next quarter, expect more carriers to flag the same exposure — and more contracts rewritten with explicit fuel language that wasn't there a year ago.

By Tom Whitfield