Diesel Is Still Above $5.50: Why Fuel Volatility Belongs in Every Routing Guide

Diesel prices have started to come down. That is not the same thing as diesel becoming cheap.

According to Logistics Management, the national average diesel price for the week of May 25 was $5.523 per gallon. That was down 7.3 cents from $5.596 the prior week and down from $5.639 on May 11, marking a third consecutive weekly decline. But the same report notes that the average was still up more than $2 per gallon year over year.

That is the fuel story for shippers: the trend line can improve while the operating cost remains painful. For transportation teams, diesel volatility belongs inside the routing guide itself, not in spreadsheets reviewed after invoices arrive.

A falling diesel price can still be a high diesel price

The May 25 average captures both sides of the current freight-cost problem. Diesel declined for three straight weeks, yet remained above $5.50 per gallon. Logistics Management reported that the May 4 average had jumped 28.9 cents to $5.640, the largest sequential increase since a 21-cent rise in mid-March. That kind of swing is exactly why annual bid assumptions age quickly.

Fuel is not a small pass-through detail for truckload and less-than-truckload freight. It shapes carrier linehaul pricing, surcharge tables, minimum charges, spot-market appetite, and how aggressively carriers protect margin on longer-haul lanes. When diesel stays elevated, carriers have less room to absorb empty miles, detention, appointment delays, and inefficient routing.

Shippers feel that in three places. Contracted rates become harder to interpret because the base rate may look stable while the surcharge escalator does the damage. Spot-market decisions become riskier when the fuel mechanism, accessorial rules, or recovery terms are unclear. Routing-guide compliance gets more fragile because a primary carrier’s economics can break before the routing guide shows a problem.

The mistake is treating fuel as an invoice issue. It is a routing issue.

Oil risk is now a transportation planning variable

Diesel remains hard to forecast because the market is not only responding to domestic freight demand. Oil prices are carrying geopolitical risk, especially around the Middle East and the Strait of Hormuz.

Logistics Management cited Reuters reporting that West Texas Intermediate crude fell as traders priced in a lower risk of Middle East supply disruption, with attention on U.S.-Iran negotiations and the possibility that the Strait of Hormuz could reopen more fully. The same article noted that Hormuz moves around 20% of global oil supply, which is why even small signs of de-escalation can remove a geopolitical risk premium from oil prices.

A separate SupplyChainBrain report shows how physical oil flows can become constrained quickly. It reported that 29 of 109 non-Iranian large oil tankers capable of hauling 700,000 barrels or more had escaped the Persian Gulf after being stranded when the Strait of Hormuz was effectively shuttered. The article also noted that those successful transits equated to about 520,000 barrels per day, still only a fraction of the crude and oil products locked inside the Gulf.

For shippers, the exact tanker count is less important than the planning lesson. Fuel risk can appear outside the transportation department and still land directly in the freight budget. A route disruption, conflict escalation, ceasefire, refinery issue, or crude-price swing can change diesel assumptions faster than a quarterly procurement review cycle.

That makes static routing guides inadequate. A guide that only ranks carriers by contracted base rate is blind to one of the most volatile inputs in freight execution.

Fuel surcharge tables need active governance

Most shippers have fuel surcharge programs. Fewer actively govern them.

The difference matters. A fuel surcharge table can be technically present and still financially weak if it uses outdated indexes, unclear baselines, mismatched regions, or inconsistent effective dates. Over hundreds or thousands of shipments, small differences compound into real money.

Transportation teams should review four elements.

Index source: The surcharge should clearly state the diesel index used, whether national or regional, and how often it updates. If the lane network has strong regional fuel exposure, a national average may not reflect actual economics.

Base price: The table should define the diesel price assumed in the base rate. If that baseline was negotiated in a different fuel environment, the surcharge may over- or under-recover cost.

Trigger bands: Wide bands can create step changes where a one-cent fuel move shifts a materially larger surcharge. Narrower bands are more precise but require cleaner audit processes.

Effective timing: Weekly index changes do not always align with shipment pickup, delivery, invoice, or rating dates. The contract should define which date controls.

Fuel surcharge auditing is not glamorous, but neither is paying preventable leakage because nobody compared the invoice math to the tariff.

Routing guides should model fuel-sensitive lane behavior

A modern routing guide should answer more than “who is first tender?” It should show how fuel changes affect the cost and reliability of each lane.

Long-haul dry van lanes are not exposed the same way as local drayage, refrigerated distribution, parcel, or intermodal. Empty-mile exposure also matters. A carrier with strong backhaul density may tolerate a volatile fuel environment better than a carrier repositioning equipment into a weak market. The same diesel price can produce different tender behavior depending on lane balance, mode, dwell time, and network fit.

Shippers should build a fuel volatility view around the lanes with the highest surcharge dollars, carriers with the largest weekly variance, lanes most likely to fall from contract to spot, and customer contracts that do not allow fuel pass-through. A shipper may have a defensible carrier fuel program and still lose margin if customer pricing does not recover the same volatility. Procurement, transportation, finance, and sales need one version of the fuel story.

A practical fuel-volatility checklist

Fuel management does not require panic. It requires a disciplined operating cadence.

Start by ranking lanes by total fuel surcharge spend, not just total freight spend. Audit the top carriers’ surcharge formulas against the relevant index, baseline, and effective date. Then model what happens if diesel rises 25 cents, 50 cents, or $1 per gallon. Which lanes become uneconomic? Which customer programs lose margin? Which seasonal peaks amplify the exposure?

Connect the scenario work to execution. If a lane crosses a cost threshold, the TMS should flag alternatives: secondary carriers, intermodal options, consolidated schedules, different shipping days, or revised appointment practices that reduce dwell and empty miles. Then close the invoice loop by comparing rated fuel, invoiced fuel, and contracted fuel.

The CXTMS takeaway

Diesel above $5.50 is a reminder that routing guides are living operating systems. They cannot be rebuilt once a year and expected to handle weekly fuel swings, oil-market shocks, carrier margin pressure, and customer pass-through complexity.

CXTMS helps logistics teams connect routing-guide rules, carrier contracts, fuel surcharge logic, shipment execution, and exception workflows in one place. If fuel volatility is still being managed in disconnected spreadsheets, schedule a CXTMS demo. We will show how to turn diesel risk into visible, auditable decisions before it shows up as margin damage.