Fuel Surcharge Costs Are Rising Again
As peak season volume surged, both major parcel carriers made aggressive moves to increase fuel surcharges (FSCs). These increases continue a trend of revenue-driven pricing that has reshaped parcel budgets over the past 24 months.
FedEx: 1.5% FSC Increase Effective Cyber Monday
FedEx implemented a 1.5% Fuel Surcharge increase effective Cyber Monday impacting domestic package, express freight, and international ground services. New FSC tables take effect December 1, 2025.
- Ground based on weekly national diesel index
- Air services tied to jet fuel pricing
- Network adjustments related to MD-11 safety reviews
UPS: 1% FSC Increase + Additional Pricing Changes
UPS announced its 10th FSC increase in the past two years, effective January 5, 2026, affecting Ground, Ground Saver®, and Domestic Air services. International Air FSC changes begin November 24, 2025.
- 5.9% Ground Saver increase for 1–9 lb shipments on December 22
- DAS/EDAS increases aligned with Ground
- Signals possible Parcel Select partnership with USPS
Why This Matters for Parcel Shippers
- Cost increases are cumulative, FSC stacks on top of GRIs and surcharges
- Discounts erode with table changes, Negotiated % off applies to higher baseline
- Budgeting volatility, Weekly index adjustments disrupt annual planning
- Peak timing magnifies cost, Highest volume = least leverage
What Shippers Should Do Next
- Build weekly indexed cost models
- Reassess FSC discounts in contracts
- Strengthen multi-carrier diversification
- Audit packaging and parcel mix
- Prepare for renegotiation with real data leverage
- Engage with consultants that help navigate all these changes
Hope is not a strategy. Precision modeling is.