Your contract indexes your Per-Stop Fuel Surcharge to the weekly average self-service cash price per gallon of diesel fuel for your station's ZIP code. Every ISP Agreement uses that language. FedEx does not write a separate index for contractors running gasoline vehicles, and it does not negotiate the indexing fuel based on what is actually in your fleet.
Most CSPs run gasoline. Step vans, Transits, ProMasters, E-series — the majority of P&D fleets in this network burn regular unleaded. Which means the majority of contractors are being paid a fuel surcharge that tracks a fuel they do not buy. In most years that is a footnote, because gas and diesel move roughly together. This is not most years.
Diesel averaged $6.285 a gallon the week of September 14, 2026 — the highest weekly price the U.S. Energy Information Administration has ever recorded and the first time it has ever crossed $6, driven by tight distillate supply rather than a crude shortage. That is up more than 37% from the July low. Regular gasoline over the same stretch went from about $3.78 to $4.319 — up roughly 14% (EIA September 15 fuel update). Diesel is up $2.55 a gallon year over year; gas is up $1.15.
So, the answer to whether the surcharge is helping or hurting is, for most of you, genuinely good news: it is helping, by more than you probably realize, and it is temporary. But the money only reaches your bottom line if you control the one variable the surcharge does not pay for. This post covers how much the spread is worth on a real CSA, why every mile matters more now than it did in June, and the specific numbers to manage against before peak volume lands on November 21.
The Core Concept: You Are Paid Per Stop, You Spend Per Mile
Two numbers were locked into your contract the day you signed: a negotiated Per Stop Fuel Surcharge in dollars, and an agreed Base Pump Price in dollars per gallon of diesel. Each week FedEx compares the Average Weekly Fuel Price for your station against that Base Pump Price and moves your per-stop surcharge by the same percentage.
Indexed Per Stop FSC = Negotiated Per Stop FSC × (Average Weekly Fuel Price ÷ Base Pump Price)
Example: with a $0.60 surcharge against a $3.00 Base Pump Price: at an Average Weekly Fuel Price of $3.40, the indexed surcharge becomes $0.68. One could say — "The Per Stop Fuel Surcharge supplements the fuel cost and is not intended to compensate for the total fuel cost"..
Now look at the structural mismatch that creates your entire opportunity and your entire risk. Revenue arrives on the count of your stops. Cost arrives on the count of your miles. Nothing in the formula references gallons, mileage, or route design. Stops pay you. Miles cost you. When diesel runs far ahead of gasoline, the revenue side of that equation inflates while your cost side does not — and whether you keep the difference comes down to how much road your drivers cover to deliver the same stops.
What the Spread Is Actually Worth
Take a ten-route gas CSA: 130 stops and 115 miles per dispatch per day, six days a week, gas step vans at a realistic 8.5 MPG loaded. Negotiated Per Stop Fuel Surcharge of $0.25 against a $3.60 diesel Base Pump Price. When the contract was signed, gasoline was running about $3.20.
At signing: each route burned 13.53 gallons a day costing $43.29, against $32.50 of surcharge. You absorbed $10.79 per dispatch per day — $648 a week, roughly $33,678 a year. The surcharge covers about 75.1% of your fuel..
Today: diesel at $6.285 against a $3.60 base gives a multiplier of 1.746, so your indexed surcharge is $0.4365 per stop — a 74.6% increase on that line. Surcharge revenue is now $56.74 per route per day. Your gasoline, at $4.319, costs $58.43. You absorb $1.69 per route per day — about $102 a week. Coverage: 97.1%.
Your unreimbursed fuel went from $648 a week to $102 a week. That is roughly $28,400 a year in improvement across ten routes, and none of it came from anything you did operationally. You are collecting a surcharge driven by a fuel up 68% year over year while buying one up 36%. For the first time in most contractors' memory, the Per-Stop Fuel Surcharge is within a rounding error of covering the entire fuel bill.
One thing that does vary contractor to contractor and deserves a look: your Base Pump Price and your negotiated per-stop amount, both in your latest negotiated contract. The index fuel is diesel for everyone, but those two figures were set at a specific moment by the OPIS price that week, and they drive how much of this spread you capture. If you have never pulled them, pull them.
The Catch: Each Stop Buys You 0.859 Miles
Here is where the opportunity becomes conditional, and it is the heart of this week's session.
At $4.319 gasoline and 8.5 MPG, a mile of fuel costs 50.8 cents. Your indexed surcharge pays $0.4365 per stop. Divide one by the other:
Each stop's surcharge funds 0.859 miles of driving.
That is the number that governs everything. At 130 stops a day, your surcharge covers 111.7 miles per route per day. The CSA above runs 115. You are 3.3 miles a day over the line — which is precisely why coverage lands at 97.1% instead of 100%.
Think about how small that is. Take 3.3 miles a day out of each route and FedEx is paying your entire fuel bill. Not most of it. All of it. A single better path through one loop, one eliminated backtrack, one driver who stops overshooting a turn gets you there.
Now run it the other direction, because this is the part contractors need to hear. That $28,400 annual gain works out to about $9.10 per route per day. At 50.8 cents a mile, 17.9 unproductive miles per truck per day hands back every dollar of it. Eighteen miles. Not eighty. A driver who backtracks twice, runs an errand on the way in, and takes the long way out of the terminal can personally consume his truck's entire share of the windfall before lunch.
So: the network handed most contractors a meaningful fuel tailwind this quarter. Whether it shows up in your distributions or evaporates into unmetered miles is decided entirely at the route level. That is not a platitude — it is 18 miles.
Peak Volume Makes It Better, Within a Limit
Because the surcharge is paid per stop, peak density works powerfully in your favor this year.
Same CSA at peak: stops up 25% to 162.5, miles up 12% to 129 — more stops in the same geography rather than new geography. Fuel goes from $58.43 to $65.45 a day, up $7.02. Surcharge revenue goes from $56.74 to $70.92, up $14.18. The extra stops paid for the extra fuel twice over, and coverage climbs from 97.1% to 108.4% — your fuel line becomes a net contributor. Layer in core stop revenue on the 32.5 extra stops at roughly $2.10 each and you are up about $4,300 a week across ten routes before any surge stop charge.
There is a clean rule for the limit:
Your miles can grow by (coverage ratio × stop growth) before the surcharge stops paying for the increase.
At 97.1% coverage and 25% stop growth, that threshold is 24.3%. Hold mileage growth under 24.3% and every additional gallon of peak fuel is funded by FedEx. Go past it and you start paying for fuel out of stop revenue that should have been margin. Push miles to 40% against 25% more stops and coverage falls to 86.7% — below where you started this quarter — even though total dollars still look healthy, because stop revenue masks it.
This matters more this peak than last. FedEx expects roughly 65% of eligible daily volume to flow through optimized Network 2.0 facilities by this peak season, with more than 200 stations already closed and 475-plus targeted by the end of 2027 (Supply Chain Dive). Consolidation adds stem miles, and stem miles are mileage growth with zero stop growth attached — the worst possible ratio and the fastest way to spend a tailwind. The peak settlement period runs Saturday, November 21, 2026 through Friday, January 1, 2027, so you have roughly nine weeks to get density right.
The fourth quarter looks even better on paper
The EIA expects retail gasoline to fall to around $3.40 a gallon in the fourth quarter as crack spreads narrow and summer demand ends, while diesel averages about $5.55 on continued distillate tightness (EIA Short-Term Energy Outlook).
If both land, the same CSA collects $0.3854 per stop against gasoline costing $46.00 a day — coverage of 108.9%, a surplus of roughly $12,800 a year, and break-even mileage rising from 111.7 to 125.3 miles per route per day. That is 10 miles of genuine headroom per dispatch, arriving exactly when peak volume does.
Treat that as weather, not climate. It is a distillate-market spread, not improved operating performance, and it closes when refinery output and inventories normalize. Budget it as temporary and put it somewhere durable: truck replacement reserve, a peak driver-retention pool, working capital. Contractors who spend a fuel spread as if it were earnings get hurt when it reverts.
Why Mileage Discipline Pays Double Right Now
Every unproductive mile does two things at once this quarter: it costs you 50.8 cents, and it consumes headroom you are only temporarily being given. That is why the same discipline you have always preached is worth more this quarter than last.
Eight unproductive miles per truck per day across ten trucks and six days is 480 miles a week — $244 a week, or about $12,683 a year, and that alone is 45% of the entire fuel-spread gain. The surcharge pays nothing toward it, because nothing was scanned.
And if you are still letting anyone take a truck home…
Two reports you already have will find most of it:
- Time between stops. Compare each driver against the route average for the same loop on the same weekday. Consistently long gaps mean backtracking, a poor path through the loop, or a stop that is not on the manifest.
- Return-to-terminal time. Benchmark it per route. A driver who finishes his last stop on schedule but reaches the yard 25 minutes late every day is running 10 to 15 unproductive miles daily — most of his truck's share of the windfall, by itself.
Personal use is a gasoline problem specifically
This one lands harder on gas fleets than diesel fleets for an obvious reason: your drivers' own cars burn the same fuel your trucks do, off the same fuel card. At $4.32 a gallon at home, your truck starts looking like a solution to a driver's household budget in a way a diesel step van never quite does.
Fifteen personal miles a week per truck across ten trucks is about $76 a week, roughly $3,963 a year — and unlike wasted route miles it buys zero service value, while the DOT, insurance, and liability exposure of a personal trip in your vehicle dwarfs the fuel cost if something happens. The controls are unglamorous and they work: geofence alerts on the yard and on off-route movement, fuel card transactions reconciled against route mileage weekly rather than monthly, a signed personal-use prohibition in every driver file, and a documented conversation the first time it appears. Enforcement is cheap in September and expensive in December, when you cannot afford to lose anyone.
Putting It Together: A Framework for Capturing the Fuel Spread
- Pull your Base Pump Price and negotiated Per Stop Fuel Surcharge from your contract. The index fuel is diesel in every agreement, but these two numbers are yours alone and they determine how much of the spread you capture. If you service stops out of multiple stations, confirm each is indexed separately.
- Calculate how many miles each stop funds. Indexed surcharge divided by your true cost per mile, using what you actually pay net of fuel-card discounts and your real loaded MPG. In our example: $0.4365 ÷ $0.508 = 0.859 miles. The Per-Stop Fuel Surcharge Impact Calculator will do it in five minutes.
- Convert it to a daily mileage target per route and post it. Miles each stop funds × your daily stops = the mileage that FedEx fully pays for. Our example: 111.7 miles against an actual 115. Every dispatch gets a number, and BCs manage to it daily rather than reviewing it quarterly.
- Know what it takes to give the gain back — and tell your drivers. Roughly 18 unproductive miles per truck per day erases the entire spread on this CSA. That number makes the stakes concrete in a way "watch your miles" never will.
- Hold peak mileage growth under coverage × stop growth. In our example, 24.3%. Under it, FedEx funds your entire peak fuel increase. Treat stem miles from station consolidation as the margin event they are, and rebalance loops so density rises faster than mileage.
- Run time-between-stops and return-to-terminal reports every Monday through January. Rank drivers, coach the outliers, document it. Lock down personal use before Thanksgiving with geofencing, weekly fuel card reconciliation, and signed policies.
- Bank the surplus and budget for it to close. Book the difference between your fuel spend and your surcharge as a temporary item, not as earnings. Put it in truck replacement reserve or peak retention, and plan your 2027 budget on coverage back near 75%.
For once, the indexing mechanic in Schedule C is working in contractors' favor, and it is working hardest for the gasoline fleets that make up most of this network. That will not last — distillate markets normalize and the spread closes. What you keep from it between now and January comes down to whether your drivers cover 112 miles to deliver 130 stops or 130 miles to deliver the same 130 stops. The operators who treat this quarter as an opportunity to tighten routes rather than a reason to relax will finish peak with the money in their accounts instead of in their tanks.
eTruckBiz Inc. works with FedEx Contracted Service Providers to turn contract terms and settlement data into the operational controls that capture exactly this kind of advantage. If you would like to walk through your own numbers, reach out to our team — the right service provider support, right now.