> ## Documentation Index
> Fetch the complete documentation index at: https://docs.tread.ai/llms.txt
> Use this file to discover all available pages before exploring further.

# Fuel Surcharges

> Set a fuel surcharge that recalculates automatically as diesel prices change.

## When to use this

Use a fuel surcharge when your rate needs to move with diesel prices instead of staying fixed. Tread applies the right surcharge tier automatically once it's configured — no manual invoice edits each time fuel prices change.

## How it works

A fuel surcharge has three parts, and all three are required — skip one and the surcharge silently drops off invoices. See [Rates, Add-Ons & Fuel Surcharges](/concepts/rates-add-ons) for how this fits the broader pricing model.

1. **Fuel Price Index** — the current price of fuel you're tracking (e.g. a regional diesel average). You update this weekly.
2. **Fuel Surcharge Schedule** — a table mapping fuel price tiers to a surcharge (a percentage of the base rate, or a flat amount per unit).
3. **Add On** — the piece that actually attaches the schedule to an order or project so it shows up on invoices and driver pay.

## Setup

<Steps>
  <Step title="Set up a Fuel Price Index">
    Go to **Settings → Rates → Fuel Price Index** and create an index (e.g. *Gulf Coast (PADD 3)*). Add a price entry with the current fuel price and today's date. Tread matches orders to the price entry dated closest to (without exceeding) the order date, so add a new entry — don't edit the old one — each time the price changes.
  </Step>

  <Step title="Build a Fuel Surcharge Schedule">
    Go to **Settings → Rates → Fuel Surcharge Schedule** and create a schedule linked to the index from step 1. Pick a rate type — **Percentage** (e.g. 1% of the base freight rate) or **Flat** (e.g. $0.25 per ton) — then add tiers: a fuel price threshold paired with the surcharge that applies at that price (e.g. $3.50 = 0%, $3.60 = 1%, $3.70 = 2%).
  </Step>

  <Step title="Create the Add On">
    Go to **Settings → Rates → Add On Charges** and create an add-on with rate type **Fuel Surcharge**, then select the schedule from step 2. Choose which add-on types it applies to — most companies select all of them.
  </Step>

  <Step title="Apply it to an order or project">
    Open an order from Dispatch or Projects and scroll to **Freight Rates**. Under the Customer Rate block (or Vendor Rate, if you pass the surcharge through to a vendor), click the ••• menu, choose **Add On**, and select the fuel surcharge add-on.
  </Step>

  <Step title="Keep the price current">
    Add a new Fuel Price Index entry every week (or on whatever cadence your surcharge schedule assumes). Tread recalculates the surcharge on every open invoice that uses that schedule within moments — no need to touch individual orders.
  </Step>
</Steps>

## How the surcharge is calculated

The surcharge applies on top of the base freight rate. If the customer rate is \$31/ton and the current tier is 1%, the fuel surcharge add-on adds that 1% to the invoice and driver pay totals automatically — no manual line-item math.

## Common pitfalls

<Warning>
  **A locked invoice won't pick up a new fuel price.** Tread recalculates fuel surcharges automatically when you add a new Fuel Price Index entry — but only on invoices that are still open. Once an invoice is approved, paid, voided, or customer-approved, the surcharge is frozen. If a rate looks wrong, check the invoice's lock status first — reopening or re-saving the order will not fix it.
</Warning>

<Warning>
  **Missing any one of the three pieces — index, schedule, or add-on — removes the surcharge with no error.** Test on a sample order before go-live, and reconcile the result against your existing fuel matrix.
</Warning>