What is Diesel Floater?

Diesel Floater is a pricing mechanism used in the transportation industry that reflects the fluctuation of diesel prices. Diesel Floater pricing is based on the continuous renegotiation of freight agreements, which accounts for the variation in the price of diesel fuel.

The Diesel Floater pricing system enables carriers and shippers to share the risks and rewards of the volatile diesel market. In this pricing mechanism, the fuel surcharge changes as the cost of diesel fuel fluctuates, which can impact the overall cost of transportation services. Diesel Floater is particularly relevant for long-haul transportation, where fuel costs account for a significant portion of the overall cost of transportation services. The Diesel Floater mechanism allows carriers and shippers to work together to manage the risks associated with fuel price volatility, ensuring that the transportation services remain competitive and sustainable. By including the fuel surcharge as a variable in the freight agreement, both parties can share the responsibility of managing fuel costs and ensuring that transportation services remain affordable and efficient.