UPS Fuel Surcharge Increases in 2025

At Gain Consulting, we are committed to equipping U.S. shippers with the insights and strategies needed to navigate the complexities of the evolving logistics landscape. The recent announcements from UPS regarding fuel surcharge increases, effective throughout 2025, signal significant cost implications for businesses reliant on ground, air, and international shipping services. As reported by multiple industry sources, including Logistics Management and Supply Chain Dive, UPS has implemented a series of fuel surcharge hikes—marking the seventh update in 2024 alone—and introduced additional fees that could impact shipping budgets. This blog post analyzes the details of these changes, their implications for U.S. shippers, and actionable strategies to mitigate rising costs in 2025.

Understanding UPS’s Fuel Surcharge Increases

UPS adjusts its fuel surcharges weekly based on fuel price indices published by the U.S. Energy Information Administration (EIA), specifically the National U.S. Average On-Highway Diesel Fuel Price for ground services and the U.S. Gulf Coast (USGC) Jet Fuel Price for air services. These surcharges are applied as a percentage of base shipping rates and certain accessorial charges, such as delivery, pickup, and residential surcharges. In 2025, UPS has continued its trend of increasing the surcharge percentages across multiple services, with notable updates detailed below:

• March 10, 2025: UPS announced a 0.5% increase in fuel surcharges for U.S. Ground Domestic, UPS SurePost, and U.S. Domestic Air services, effective March 10, 2025. For example, at a diesel fuel price of $3.20 per gallon, the Ground and SurePost surcharge rose from 17.25% to 17.75%. Similarly, Domestic Air surcharges increased by 0.5% across various jet fuel price thresholds. Additionally, these surcharges now apply to weekly scheduled pickup fees for Ground and SurePost services.

• May 12, 2025: The U.S. International Ground Export/Import Fuel Surcharge and U.S. International Air-Export/Import surcharges will change, with updates reflected on UPS’s website starting May 8, 2025. These adjustments continue to be based on diesel fuel prices for ground and jet fuel prices for air, adjusted weekly.

• May 22, 2025: Further changes to U.S. Ground Domestic, UPS Ground Saver (formerly SurePost), and U.S. Domestic Air Fuel Surcharges will take effect, with details posted on UPS’s Fuel Surcharge website.

• Historical Context: In 2024, UPS implemented seven fuel surcharge table updates, with the December 23, 2024, increase resulting in an average 5.4% rise in fuel costs for customers across Ground, SurePost, and Express services. This marked the third increase since December 2023, following hikes of 0.5% on December 4, 0.75% on December 18, and 0.5% on April 29, 2024. Since Q4 2021, ground service fuel surcharges have risen by 75%, reflecting a significant upward trend.

These increases are part of UPS’s broader strategy to offset operational costs amid fluctuating fuel prices and declining package volumes. According to Supply Chain Dive, the 2024 adjustments drove a 4.7% increase in average net fuel costs for ground parcel shipments from Q3 to Q4, despite a decline in on-highway diesel prices. The 2025 hikes build on this trend, with UPS leveraging fuel surcharges as a revenue-generating tool, as noted by Shipware, which described carriers like UPS using surcharges to “capitalize” on shippers.

Key Takeaway: UPS’s 2025 fuel surcharge increases, combined with frequent 2024 adjustments, significantly raise shipping costs, particularly for ground and air services, with surcharges now applying to additional fees like scheduled pickups.

Contextual Factors Driving the Increases

Several factors contribute to UPS’s decision to raise fuel surcharges, despite falling fuel prices in some periods, as highlighted by industry analyses and X posts:

1. Revenue Recovery Amid Market Challenges: UPS and FedEx are facing declining package volumes, prompting both carriers to increase surcharges to boost per-package revenues. Reveel noted that UPS’s 2024 increases, totaling a 1.75% year-to-date rise, led to an 11.7% increase in the fuel portion of costs, far outpacing the 1.5% rise in total shipping costs. This suggests a strategic move to recover concessions from aggressive pricing negotiations.

2. Disconnect from Fuel Prices: Despite declining diesel and jet fuel prices, UPS has raised surcharges, prompting criticism on platforms like X. A post by @_ShipPlug on May 22, 2025, stated, “Fuel prices didn’t go up. But your shipping costs did. #UPS and FedEx raised fuel surcharges well above national diesel prices. Because they can.” This sentiment reflects a perception that carriers are using surcharges as a profit lever rather than a direct reflection of fuel costs.

3. Operational Cost Pressures: UPS’s April 2025 earnings call revealed a major network reconfiguration, the largest in its history, aimed at improving efficiency. Fuel surcharge increases help fund these investments while maintaining profitability amid inflationary pressures and labor costs.

4. Competitive Dynamics: UPS’s surcharge hikes often align with or prompt similar moves by FedEx. Supply Chain Dive reported that FedEx could match UPS’s increases, as seen in 2024 when FedEx raised its ground surcharge by 1% shortly after UPS’s 0.75% hike on August 26. This competitive maneuvering amplifies cost pressures for shippers.

5. Regulatory and Environmental Factors: ShipSigma highlighted that regulatory shifts toward green energy may increase operational costs, as carriers invest in cleaner technologies. While fuel-efficient trucks and optimized routes reduce consumption, UPS may be passing these transition costs to shippers through surcharges.

Key Takeaway: UPS’s fuel surcharge increases are driven by revenue recovery, competitive dynamics, and operational investments, even as fuel prices decline, creating a challenging cost environment for shippers.

Implications for U.S. Shippers

The UPS fuel surcharge increases have significant implications for U.S. shippers, particularly those with high shipping volumes or reliance on ground and air services:

1. Rising Shipping Costs: The 0.5% increase effective March 10, 2025, adds to the cumulative 5.4% fuel cost rise from 2024’s seven updates, significantly impacting budgets. For example, a $100 base rate shipment with a 17.75% surcharge incurs a $17.75 fuel fee, compared to $17.25 previously. High-volume shippers face compounded costs across thousands of shipments.

2. E-Commerce and DTC Challenges: As e-commerce grows, residential delivery surcharges, which are subject to fuel surcharges, add to costs for direct-to-consumer (DTC) businesses. Logistics Management noted that last-mile delivery is one of the most expensive aspects of shipping, and UPS’s SurePost changes (e.g., a 69.4% increase in Extended Delivery Area Surcharges) exacerbate this.

3. Diminished Discounts: Higher surcharges reduce the effectiveness of negotiated discounts. Reveel reported that a 25% discount secured in early 2024 may now yield only a 15% benefit due to rising surcharge rates, eroding cost savings.

4. Budget Planning Uncertainty: Weekly surcharge adjustments tied to EIA indices, combined with periodic table updates, make cost forecasting difficult. Mindful Logistics emphasized that businesses must monitor changes closely, especially during peak seasons when additional surcharges apply.

5. Impact on Specific Services: The inclusion of weekly scheduled pickup fees in Ground and SurePost surcharges, effective March 10, 2025, adds costs for businesses with regular pickups. Similarly, international shippers face higher costs with the May 12, 2025, updates to export/import surcharges.

Key Takeaway: U.S. shippers face rising costs, reduced discount effectiveness, and planning challenges due to UPS’s frequent surcharge increases, particularly impacting e-commerce, high-volume, and international shipping.

Strategic Recommendations for U.S. Shippers

To mitigate the impact of UPS’s fuel surcharge increases and maintain cost efficiency in 2025, Gain Consulting recommends the following strategies:

1. Negotiate Surcharge Discounts: Work with UPS to secure fuel surcharge discounts (10–50% off) or incentives in your service agreement. Refund Retriever suggests that effective negotiations can reduce or eliminate surcharge impacts, especially for high-volume shippers. Engage a consultancy like Gain Consulting to analyze your contract and optimize terms.

2. Consolidate Shipments: Reduce the number of shipments by consolidating orders or optimizing package dimensions and weight. Supply Chain Dive noted that consolidating shipments can mitigate surcharge impacts, as fuel fees are applied per package. Use dimensional weight calculators to minimize billable weight.

3. Explore Alternative Carriers: Compare rates from FedEx, USPS, or regional carriers like OnTrac or LSO. Mindful Logistics recommends exploring regional carriers for competitive pricing, especially for local or rural deliveries where UPS’s Delivery Area Surcharges (DAS) are high. OnTrac’s 2024 holiday surcharge of $0.75 per residential package is simpler and potentially cheaper than UPS’s structure.

4. Leverage Technology for Cost Visibility: Implement a Transportation Management System (TMS) or parcel spend analytics platform like Reveel or Shipware to track surcharge costs and identify savings opportunities. These tools provide real-time insights into fuel surcharge impacts and carrier performance. Reveel’s Parcel Spend Management 2.0 platform helps shippers optimize costs amid 2025 rate hikes.

5. Optimize Shipping Strategies: Adjust delivery schedules or use alternative fulfillment locations to avoid high-zone or DAS fees. Mindful Logistics suggests analyzing UPS’s updated zone charts (available March 24, 2025) to identify cost-effective lanes. For international shipments, adopt UPS Paperless Invoice services to avoid the $10 per-shipment fee for paper invoices.

6. Monitor Fuel Price Trends: Track EIA diesel and jet fuel indices to anticipate surcharge fluctuations. Subscribe to UPS’s Fuel Surcharge website updates or industry reports from LJM Group for real-time insights. Proactively adjust budgets for peak seasons when surcharges and demand fees overlap.

7. Engage in Industry Advocacy: Join organizations like the Parcel Shippers Association or Council of Supply Chain Management Professionals (CSCMP) to advocate for fair surcharge practices and gain insights into carrier strategies. Collaborative networks can provide early warnings of fee changes.

8. Plan for Peak Season Costs: Prepare for combined fuel and peak/demand surcharges (effective September 30, 2024–January 19, 2025, for UPS) by negotiating capped rates or volume-based discounts. Logistics Management noted that UPS anticipates a “pretty picky peak” in 2025, with strong demand surcharges due to fewer operating days.

Key Takeaway: Shippers can mitigate UPS’s surcharge increases by negotiating discounts, consolidating shipments, leveraging technology, and exploring alternative carriers while preparing for peak season cost spikes.

How Gain Consulting Can Help

Gain Consulting is your trusted partner in navigating the rising costs of UPS’s 2025 fuel surcharges. Our tailored solutions empower U.S. shippers to optimize their supply chains and maintain profitability:

• Contract Negotiation Support: Analyze and renegotiate UPS agreements to secure fuel surcharge discounts and value-added services, maximizing cost savings.

• Cost Optimization Strategies: Identify opportunities to consolidate shipments, optimize packaging, and reduce billable weight to minimize surcharge impacts.

• Technology Integration: Deploy TMS and analytics platforms to track surcharge costs, monitor carrier performance, and forecast expenses with precision.

• Carrier Diversification: Develop a balanced carrier portfolio, integrating UPS, FedEx, USPS, and regional providers to ensure cost efficiency and capacity reliability.

• Market Intelligence: Provide real-time updates on fuel surcharge trends, EIA indices, and UPS policy changes to inform your budgeting and planning.

The UPS fuel surcharge increases in 2025, building on seven updates in 2024, underscore the need for proactive cost management in a challenging logistics environment.

Contact Gain Consulting today to build a resilient, cost-effective supply chain that thrives amid rising surcharges and market uncertainties.

Sources: Logistics Management, April 25, 2024, and May 14, 2025; Supply Chain Dive, March 7, 2025; TransImpact, March 7 and December 17, 2024; Reveel, September 12, 2024; Shipware, June 3, 2024; Mindful Logistics, September 6, 2024; Refund Retriever, December 17, 2024; UPS.com, March 26, 2025