A negotiated price can stop being a fixed price when its fuel or tariff adjustment begins to move. For procurement teams making 2027 commitments, the exposure lies in the clause that converts an outside cost change into a revised invoice.
Diesel Producer Prices Are Up 77.8% Since Last August
The latest available Bureau of Labor Statistics (BLS) producer-price data show why fuel has returned to the foreground. The index for No. 2 diesel fuel was 77.8% higher in August 2026 than a year earlier, after jumping 24.1% in a single month. That is a producer-price measure, not the increase in every carrier's pump price or a prediction of any buyer's freight bill. Its relevance is that large fuel movements can activate adjustments in contracts that tie charges to an agreed index.
Public company filings show the mechanism without proving that every U.S. supplier uses it. Norfolk Southern's own 10-Q reports that contracts covering approximately 95% of its revenue include negotiated fuel surcharges. Its fuel-surcharge revenue reached $415 million in the second quarter of 2026, compared with $203 million a year earlier. Those figures describe one railroad's contract base and revenue, but they make clear that a surcharge can be financially material even when the underlying service contract has already been signed. Bunker and emissions surcharges create the same exposure in ocean freight, sitting outside a carrier's headline rate entirely.
A Weekly Index Can Turn One Approved Rate Into a Different Invoice
The timing can matter as much as the index. Trucking company Covenant Logistics' own filings say most of its fuel surcharges use the Department of Energy's average price for the week before shipment, so the company typically bills customers in the current week based on the previous week's index. This creates a lag. During a sharp increase, the carrier may recover less than its current fuel cost; when prices fall, the reverse can occur. For the buyer, a weekly adjustment means an approved transportation rate may still produce a different invoice a week later, the same disconnect between a signed price and what a supplier can actually deliver at that price that shows up across fixed-price agreements once energy, freight and material costs start moving independently of the contract term.
Tariff clauses add another variable. LCI Industries' 2026 filings describe both ongoing tariff-related cost pressure passed through under index pricing and, separately, a liability of roughly $88.8 million to pass IEEPA tariff refunds back to certain customers. Whether that reciprocity actually exists is the useful contract test. If a supplier can increase a price when a tariff adds cost, does the buyer receive a corresponding adjustment when the tariff is reduced, removed, refunded or found inapplicable? The answer depends on the actual agreement, product and duty paid. Buyers in energy contracts are running into the identical problem, where broad pass-through language accepted as boilerplate is now generating invoices they never modeled.
Where to Start the Contract Review
Before signing 2027 volume or price commitments, buyers should trace each adjustment from trigger to invoice. Identify the named fuel index, its publication date, the base price at which the surcharge begins, the update frequency, and whether a floor or cap applies. For tariffs, establish which product and import transaction qualifies, what proof of cost the supplier must provide, and when reductions or refunds flow back. Check whether a supplier can apply overlapping fuel, freight, material and tariff adjustments to the same cost.
Negotiating leverage will differ by market. A buyer with several qualified carriers or substitute sources may be able to seek tighter triggers, audit rights or a shorter adjustment period. A supplier facing volatile inputs may insist on a pass-through in exchange for a lower base bid or a firm capacity commitment. Neither position resolves the key issue unless both parties agree on how the clause works when costs rise and when they fall.
The evidence here supports a contract review, not a claim that surcharge terms are universal. Start with the categories where transportation or imported inputs form a substantial share of cost, compare the adjustment language across bids, and model a few price paths before awarding the business. Competitive advantage in 2027 may depend less on obtaining the lowest opening quote than on knowing which supplier gives the buyer the most predictable final price.
