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How FedEx and UPS Fuel Surcharges Affect Shipping Rates

By Last updated on: March 8, 2019
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When it comes to small parcel shipping companies like FedEx and UPS, you may have noticed a fuel surcharge. The cost of fuel and transportation impact delivery companies greatly. The surcharge was designed to help protect carriers during times of high gasoline, diesel, and airplane fuel prices. However, the price of fuel dropped by almost a third in last year to levels not seen in a while. Despite the drop in the cost of fuel, the surcharge still exists although the percentage has gone down.

Why Does the Fuel Surcharge Exist?

Fuel surcharges allow for UPS and FedEx to keep its base shipping rate while making the necessary changes to cover any increase in fuel price. In other words, instead of having to make changes to the standard shipping rate every month instead of once a year as the current policy is set, they can instead add or decrease the fuel surcharge rate.

In addition to the fuel surcharge, there are other fees that UPS and FedEx use to keep their base shipping price the same. From residential, extended area surcharges, to pickup charges, adding fees has become the preferred method for shipping companies to cover their revenue while not changing the base price.

Fuel Surcharge Percentage Increase

Both UPS and FedEx add a fuel surcharge percentage to import and export shipments which raise the overall price. The percentage is based on the average monthly fuel price increase or decrease over the course of the year. Since fuel prices normally rise in the spring and early summer, this can add a noticeable charge to your shipments.
The published fuel surcharge is 4.25% for UPS ground services and 2.25% for UPS air services, UPS 3 day select, and international services in April 2016.

In April 2016, FedEx saw a surcharge of 2.75% on ground and home delivery but 0% surcharge on Express and international services. On May 2, 2016 shippers were hit with a 0.5% Express surcharge and 3.0% Ground and Home Delivery. DHL now has a 0.5% fuel surcharge across the board.

How Refund Retriever Can Help You with Parcel Recovery

Charges like these creep into your invoices and make them less predictable for businesses that rely on FedEx and UPS.

Want to cut the cost of shipping? Our late shipment and refund technology will be your new best friend. Sign up using the online form and you are ready to go. Get refunds for late deliveries (GSR), duplicate charges, non-shipments, and shipping refunds for a variety of charges such as deliveries on Saturday, incorrect address, and residential surcharges. Contact us today.

Brian Gibbs

Author Brian Gibbs

More posts by Brian Gibbs

Brian Gibbs | President of Refund Retriever

Brian Gibbs founded Refund Retriever in 2006 while running his first eBay based business and seeing the shortcomings of other shipment auditing companies. Refund Retriever's primary focus is FedEx and UPS parcel invoice auditing. After graduating from Texas A&M University in 2001, he then graduated from the University of Houston in 2004 with a JD and MBA. Gibbs has been featured in Forbes, Entrepreneur and other publications discussing parcel auditing, shipping, e-commerce and more. Learn more at or call (800) 441-8085 for more information.

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