Diesel Fuel Surcharges & What It Means for Ingredient Costs

At Austrade, we believe in straightforward communication with our partners — especially when market forces create conditions that affect your supply chain.

We’re reaching out now so you can plan accordingly: pricing adjustments on select ingredients are coming over the next several weeks and months. These increases are not arbitrary, and we want to explain exactly what’s driving them.

The Root Cause: Diesel Fuel and the Middle East Conflict

The escalating conflict in the Middle East — specifically the coordinated military strikes on Iranian targets in late February 2026 and all subsequent regional escalation — has sent shockwaves through global markets.

The Strait of Hormuz is the world’s most critical oil chokepoint, responsible for transporting more than 20% of the world’s oil supply. Ongoing regional attacks on energy infrastructure and supply chain bottlenecks have directly impacted global prices for crude oil, natural gas, and refined products. The downstream effect on diesel — the fuel that physically moves ingredients from origin to facility — has been swift and severe.

U.S. diesel prices have risen nearly 38% in the 20 days following initial strikes on Iran, reaching an average of $5.04 per gallon — the highest since December 2022. Diesel prices recorded their largest-ever single-week increase in both price-per-gallon and percentage terms on March 9, 2026 — the steepest on record since the government began tracking diesel prices in 1994.

What This Means for Trucking and Freight

Carrier Surcharges Effective: March 23, 2026

Diesel fuel doesn’t just power trucks — it powers the entire infrastructure that connects ingredient suppliers to food and beverage manufacturers across the country. Approximately 83% of American agricultural products depend on diesel fuel for both production and transport.

The cost impact on carriers has been immediate, and two of the largest industry players are already responding:

In Q4 2025 alone, a 4.7% year-over-year increase in diesel prices corresponded with a 26% increase in carrier fuel surcharges. The acceleration seen in March alone is significantly sharper than anything recorded in Q4 2025.

In a recent industry poll, freight rate increases ranked as the single largest supply chain concern — cited by 44% of supply chain and logistics professionals surveyed.

Ocean Freight: Emergency Surcharges Across All Trade Routes

Effective Across Virtually All Shipping Lanes · March 2026

The disruption extends well beyond domestic trucking. Ongoing geopolitical tensions across the Strait of Hormuz, the Arabian Peninsula, and the Red Sea have generated sweeping disruptions to global maritime freight — touching virtually every ocean trade route that moves food-grade ingredients internationally.

In a March 2026 service alert, global freight forwarder Kuehne+Nagel confirmed that shipping companies are now being forced to implement extensive operational measures and apply multiple layers of emergency surcharges across all affected lanes. The combination of sharply increased energy prices, growing utilization of transport capacity, and additional operational challenges is driving cost increases across the entire transport chain.

Active ocean freight surcharge categories (route-dependent):

Why This Impacts Ingredient Pricing

Unlike general freight, food-grade and refrigerated cargo operate on a fixed schedule with no room for delay. Temperature-sensitive cargo must move without interruption, which means every carrier surcharge passes directly through to landed costs.

Austrade sources and distributes a wide range of Certified Organic and Non-GMO plant-based ingredients — including organic sunflower lecithin, premium plant proteins, natural starches, clean label sweeteners, and oils. Virtually all of these products are transported to your manufacturing facility by diesel-powered freight.

Economists warn that elevated diesel fuel prices add inflationary pressure across the supply chain — a dynamic that affects every ingredient category Austrade carries, from bulk proteins and starches to specialty oils and sweeteners.

Our Commitment to You

Our commitment to transparency means that every price adjustment will be communicated before your order ships.

We strongly encourage you to use this window to: