UPS rolls out fuel surcharge hikes, processing fee changes

UPS is increasing its fuel surcharge calculations and changing some other fees, the carrier announced on its website. Experts warn the moves will put further pressure on shippers’ delivery costs.

On Monday, the company will bump up its fuel surcharge calculations by 50 basis points for its ground, air and SurePost services in the U.S. 

UPS adjusts its index-based fuel surcharges weekly based on the U.S. Energy Information Administration’s average on-highway diesel fuel price and the U.S. Gulf Coast jet fuel price average. Those averages determine the surcharge rate for fuel on ground and air services. Rival FedEx handles fuel surcharges the same way.

As an example of the increase’s impact, if the diesel fuel index’s price per gallon is $3.20, a UPS Ground or SurePost shipment will see a 17.75% markup rather than a 17.25% fee under previous calculations.

The increase builds upon the frequent fuel surcharge hikes UPS, along with FedEx, levied in 2024. Those adjustments drove the average net fuel cost for ground parcel shipments up 4.7% from Q3 to Q4, even with a decline in on-highway diesel prices, according to the TD Cowen/AFS Freight Index.

“Fuel surcharge increases impact every customer differently,” Kenneth Moyer, partner and VP of supply chain strategies at LJM Group, said in an email to Supply Chain Dive. “Keeping track of what it means for your business allows you to implement mitigating strategies like consolidating shipments and optimizing package dimensions and weight.”

More fee changes from UPS are coming on March 31 “to modernize invoices and payment options for customers,” according to the carrier’s website. Those adjustments are:

• A $5 fee for each printed UPS invoice copy sent to shippers or other payors.
• A $25 charge per payment made by check