WALTHAM, Mass.—Frustrated with rising oil prices and seeing no relief in sight, the vast majority of shippers anticipates that diesel fuel surcharges will rise substantially this autumn. A remarkable 90 percent of the 893 readers who participated in an exclusive online poll by Logistics Management last month said they expected to be paying higher surcharges to motor carriers in the coming months.

Most trucking companies now include clauses in their contracts that allow for automatic, periodic increases that are tied into rising diesel fuel prices. "When truckers first came out with fuel surcharges, they would raise them in five-cent increments," said pricing consultant and Logistics Management columnist Ray Bohman. "With the very volatile market for oil [right now], they are raising them by one-cent increments almost every week."

Our survey, conducted in late August, found that shippers who buy truckload (TL), less-than-truckload (LTL), or both types of service were paying an average fuel surcharge of 13.3 percent above their base freight rates. The largest segment of survey respondents—39 percent—reported that their fuel surcharges ranged between 11 and 15 percent. However, 3 percent of survey takers said that their fuel surcharges exceeded 25 percent.

Companies that ship only with LTL carriers pay the lowest supplemental fuel expenses, the survey found. Those shippers on average shelled out 10.7 percent over their base freight rates, while truckload shippers incurred an average charge of 15.5 percent.

The survey also found that shippers that are moving goods to and from California pay an average fuel surcharge of 13.75 percent, compared to 12.46 percent for those shipping to other parts of the country. West Coast shippers face higher accessorial fees because many motor carriers have begun indexing their surcharges to the price of diesel fuel in California, rather than to the national average. Diesel costs more in California than it does in other parts of the country because that state requires a special fuel blend to comply with environmental regulations.

As crude oil prices remain above $65 a barrel, logistics managers appear resigned to paying higher fuel surcharges this fall. As a group, shippers participating in the survey said they expected that the average fuel surcharge would rise from 13.3 percent this summer to 18.2 percent in the fall. A small number of respondents were more pessimistic: Five percent said they anticipated that fuel surcharges would reach 30 percent or higher.

Shippers have good reason to remain anxious, as many oil industry experts predict that fuel prices will remain elevated throughout the rest of the year. "The underlying price of fuel will remain high for the foreseeable future," says Martin Labbe, president of the firm bearing his name in Ormond Beach, Fla. "The only thing that could cause downward prices would be if the speculators felt that the economy wouldn't do as well."

Given the persistent upward spiral in fuel prices, 88 percent of readers canvassed in the survey said that they planned to increase their transportation budgets in 2006 to cover rising costs associated with fuel surcharges. The average planned increase was 10 percent, but the survey uncovered a wide range of reactions. Five percent of survey respondents said they were eyeing 25-percent hikes in their budgets, while another 14 percent said they had no idea how much to adjust their spending plans.

Shippers clearly are worried by runaway fuel prices. "Sadly, there's no way but up for fuel until we figure some way to do something positive with energy," said Bill Box, traffic manager at Old Mother Hubbard, a pet food company in Chelmsford, Mass. "I don't see the government trying to provide relief."

Indeed, the federal government's indifference toward the plight of shippers and truckers was a theme echoed throughout the survey. "The government seems to be unwilling or unable to address the issue," wrote one shipper. Said another: "The government is condoning the rising prices instead of controlling them."

Readers also expressed fears that increased costs would sideline more carriers. "The cost of fuel is driving independents out of business—and we already have a lack of drivers and operators," said one survey taker. "If the price increases continue, I have concerns that TL capacity may be jeopardized as a result of the independent truckers pulling out of the business," wrote another respondent.

Many survey participants said they believed that rising transportation costs would harm the economy. "The consumer is not only paying at the pump, but they are also paying at the stores because companies are adding retail cost to offset transportation cost," wrote one shipper.

Although rising fuel surcharges make it more difficult to hold down transportation costs, logistics managers indicated that they had little choice but to work harder at optimizing their shipments. "Is $75 [for a barrel of oil] the top end? Who knows?" asked Jeff Leep, corporate logistics director for lighting manufacturer Genlyte Group in Louisville, Ky. "We can't control the cost of crude oil. Our goal is to optimize transportation costs by creating truckload opportunities versus multistop LTL, and by making sure we ship complete orders so we don't have multiple shipments."