Fuel Surcharges and Parcel Shipping Costs: What U.S. E-Commerce Sellers Need to Know

Fuel Surcharges and Parcel Shipping Costs: What U.S. E-Commerce Sellers Need to Know

Fuel surcharges are additional fees carriers add to base shipping rates to cover changes in fuel prices. Major U.S. parcel carriers (UPS and FedEx) adjust these surcharges frequently based on published fuel indices. In practice, this means that when diesel or jet fuel costs rise, the carriers’ fuel fee (often 15–25% of the base rate) rises accordingly. The exact amount is recalculated (usually weekly) using government price indexes. These surcharges can significantly affect an e-commerce seller’s shipping bills, especially at high volumes. (By contrast, the U.S. Postal Service does not add any separate fuel surcharge – its rates are “all-in”.)

Carrier Resources: For current rates, see the carriers’ official pages. UPS publishes its U.S. fuel surcharge tables on its website. FedEx similarly posts fuel surcharge tables updated weekly. (USPS shipping info is also available; note that USPS pricing includes fuel by default.)

How UPS Calculates Fuel Surcharges

UPS uses an index-based fuel surcharge that is adjusted every Monday. The ground/SurePost surcharge is tied to the U.S. national on-highway diesel price, and the air surcharge to the U.S. Gulf Coast jet fuel price. Each week UPS looks at the latest EIA fuel reports then applies a percentage fee from a published table. For example, UPS’s table has thresholds such that at roughly $3.20/gal diesel, the Ground fuel surcharge was about 17.75% of the base rate. UPS has raised these table rates several times: in March 2025 it bumped its fuel surcharge thresholds by 0.50 percentage points for ground and air services. Effective March 10, 2025, UPS announced a new table (still indexed to the EIA’s diesel and jet prices). Moreover, in August 2024 UPS expanded the scope of charges subject to the fuel surcharge – adding fees like address correction and hazardous-materials surcharges into the surcharge calculation. In short, UPS ground fuel fees are typically in the high-teens or low-twenties percent, and they change weekly with fuel prices.

How FedEx Calculates Fuel Surcharges

FedEx also uses weekly fuel indexes. Its fuel surcharge page explains that FedEx Ground/Home/International Ground rates use the U.S. on-highway diesel price, while all other FedEx services use the U.S. Gulf Coast jet fuel price. FedEx publishes percentage tables for each week. For example, an update effective June 9, 2025 shows that with diesel at ~$3.74/gal, the Ground fuel surcharge is about 20.5% of the base rate. FedEx has hiked these rates multiple times: between Q1 2024 and Q1 2025, the FedEx Ground surcharge jumped roughly 12% (despite an 8.4% drop in diesel cost). In practice, FedEx’s fuel fee for a typical parcel service is on the order of 18–21% recently, updated each week. (Like UPS, FedEx has also been expanding which zip codes and services incur these surcharges.) Sellers can always view the current FedEx fuel surcharges to calculate their shipping costs.

USPS and Fuel Surcharges

USPS shipping rates are flat and fuel-inclusive. USPS has “upfront pricing” and does not add any separate fuel surcharge. In other words, USPS simply adjusts its published Priority Mail, Ground Advantage, etc. rates through the USPS price-setting process; it never tacks on a variable fuel fee. For e-commerce sellers, this means shipping via USPS avoids any extra “fuel surcharge” line item. USPS rates (Priority Mail, First-Class, Media Mail, etc.) are based on weight/zone or flat-box prices, and those rates already factor in typical fuel costs. (See the official USPS shipping services information for current rates.)

Impact on E-commerce Sellers

Fuel surcharges directly raise each package’s shipping cost. At mid-2025 levels, surcharges were on the order of ~20% of the base parcel rate for UPS and FedEx. For a high-volume seller, even a few percentage points matter. For example, industry data show UPS/FedEx fuel cost factors drove up net ground shipping costs about 4.7% from Q3 to Q4 2024 (even though fuel prices were falling). Likewise, FedEx reports its surcharge jumped ~12% from 2024 to 2025. Over thousands of shipments, a 20% fuel fee on a $10 average parcel adds $2 per box – which could be $2000 extra on 1000 shipments. These extra costs eat into margins. And because carriers update the tables without much notice, sellers must stay alert: a weekly UPS or FedEx announcement can raise surcharge rates on short notice. In practice, UPS and FedEx have been increasing their fuel tables often in 2024–2025, squeezing more revenue per package. (For details, see UPS’s fuel surcharge notice and FedEx’s updates.)

Tips for Managing Fuel Surcharges

• Negotiate and contract carefully. High-volume shippers can sometimes negotiate fuel terms. In competitive markets, a carrier may agree to limit or waive surcharges for very large or long-term customers. Consider bundling volume or committing to a contract in exchange for a lower fuel fee.

• Consolidate and optimize shipments. Since fuel fees are a percentage of weight/cost, reducing package count helps. Combine orders, use pallet shipments for bulk orders, and ensure packaging is as small/light as possible. Experts advise “consolidating shipments and optimizing package dimensions and weight” to mitigate rising fuel costs.

• Compare carriers and services. Check whether USPS or regional carriers (like UPS SurePost or FedEx Ground Economy) could be cheaper in fuel fees. (USPS, for example, has no fuel surcharge, though its base rates may differ.) Also, slower ground services often have lower surcharges than expedited air services.

• Use shipping software/tools. Many shipping platforms automatically apply the correct, up-to-date fuel surcharge from the official tables. Use calculators or APIs from the carriers: UPS and FedEx both provide current fuel tables. Plugging actual surcharges into your pricing model ensures you charge or budget correctly.

• Monitor weekly updates. Fuel surcharges change often. Assign someone to watch UPS and FedEx announcements or subscribe to industry updates. Being proactive lets you adjust shipping charges or budgets quickly.

Fuel surcharges are an unavoidable part of parcel shipping today. UPS and FedEx tie their fuel fees to official fuel-price indexes and update them almost weekly. For high-volume e-tailers, these fees can add up to a significant portion of shipping spend.

The best defenses are understanding how each carrier calculates the surcharge (via their official tables and FedEx’s surcharge list), using alternate services when possible (like USPS’s fuel-free rates), and negotiating smartly. By staying informed and optimizing shipping strategy, sellers can mitigate – though never fully eliminate – the cost impact of fuel surcharges on their operations.