US rail fuel surcharges for grain shipments surge 231% to record high

Rail fuel surcharges for grain shipments in the United States reached an all-time high in November 2026, significantly increasing logistics costs for farmers, grain elevators and exporters. According to the US Department of Agriculture’s (USDA) Grain Transportation Report, the average fuel surcharge charged by Class I railroads rose to $0.76 per mile, up 231% from April. The main driver of the increase was a sharp rise in diesel fuel prices during the year.

Fuel surcharges vary considerably among railroad operators. In November, BNSF set its rate at $0.61 per mile, Union Pacific at $0.84 and Norfolk Southern at $0.95, while rates for Kansas City Southern and Canadian National routes reached $1.04 per mile. As a result, the difference between the lowest and highest rates is approximately 70%, affecting the competitiveness of individual transportation routes.

Most US railroad companies calculate fuel surcharges based on retail diesel prices with a lag of approximately two months. However, shippers’ actual costs depend not only on the per-mile rate but also on the calculated route distance. Changes in the mileage used by an operator to determine transportation costs can increase the total surcharge even when the per-mile rate is lower.

For example, on the wheat transportation route from Salina, Kansas, to Houston, BNSF’s fuel surcharge was $9 per railcar lower than Union Pacific’s just one month earlier. However, following an adjustment to the calculated route mileage, it became $50 per railcar higher. This illustrates how railroad pricing mechanisms can significantly affect the final cost of transporting grain to export terminals.

Some easing of fuel-related pressure on the transportation sector is expected in 2027, although costs are likely to remain elevated. According to the US Energy Information Administration (EIA), the average retail diesel price next year is forecast at approximately $4.50 per gallon and is expected to remain above $4 throughout the year. This means fuel surcharges will continue to account for a significant portion of additional rail grain transportation costs, increasing the financial burden on US producers and exporters.

Tags: USA, fuel, rail transportation