UPS rolls out fuel surcharge increases

Earlier this week, Atlanta-based global freight transportation and logistics services provider UPS announced it is increasing fuel surcharges for various service offerings.

The company said that these fuel surcharge increases, which take effect on April 29 will apply to charges for the following:

• UPS Ground Domestic and UPS SurePost, with increases from 14.75% to 17.75%, across a range of prices per gallon—from at least $3.26 per gallon but less than $3.38 per gallon to at least $4.70 per gallon to $4.82 per gallon—based on the National U.S. Average On-Highway Diesel Fuel as most recently released by the U.S. Energy Information Administration to the nearest cent; and
• UPS Domestic Air Fuel Surcharge, with increases from 16.25% to 19.25%, across a range of prices per gallon—from at least $2.36 per gallon but less than $2.41 per gallon to at least $2.96 per gallon to $3.01 per gallon—based on the U.S. Gulf Coast price for kerosene-type jet fuel as most recently released by the U.S. Energy Administration rounded to the nearest cent

UPS said that the Ground Domestic and UPS SurePost Fuel surcharge will apply to charges for: UPS Ground, UPS Ground with Freight Pricing, UPS Hundredweight Ground Service, UPS SurePost, and UPS Basic. And it added that the UPS Ground Domestic Fuel Surcharge does not apply to the UPS Ground packages originating in the 48 contiguous United States when subject to retail sales.

And it added that the Domestic Air Fuel Surcharge applies to charges for the following services: UPS Next Day Air Early, UPS Next Day Air, UPS Next Day Air Saver, UPS 2^nd Day Air A.M., UPS 2^nd Day Air, UPS 3 Day Select, and UPS Hundredweight Air Services

UPS also noted that these announced fuel surcharges apply to both domestic and international transportation charges and certain acquisition charges, including: Delivery Charges, Pickup Charges, Remote/Extended Delivery and Pickup Charges, Residential Surcharge, Return Services w/ Pickup, Saturday Delivery and Pickup, Signature Required Services, Additional Handling, Large Package and Over Maximum Limits, Oversize Pallet Handling Surcharge, and Peak/Demand Surcharges.

This marks the third time in the last five months UPS has increased the fuel surcharge for its Ground Domestic, SurePost, and Air Domestic, according to an analysis from San Diego-based parcel consultancy Shipware.

“For example, the current Ground Domestic FSC, 15.75%, would be 16.25% on April 29,” the firm explained. “This marks the third increase to the domestic and SurePost FSC’s from UPS since December: December 4-0.5%, December 18-0.75%, April 29-0.5%.”

Shipware Senior Director of Professional Services Josh Taylor commented in a LinkedIn post that these announced increases represent essentially another 0.5% GRI for almost everyone that ships.

“So, while 2024’s 5.9% GRI wasn’t the highest ever, UPS has effectively turned it into a 7.65% GRI through increases to the fuel surcharge tables,” he said. “UPS does it this way because fewer people understand how it will affect their bottom line.”

UPS CEO Carol Tomé said on the company’s first quarter earnings call earlier this week that the commpany’s quarterly revenue per package (RPP) was flat, noting that fuel prices were a drag on RPP during the quarter.

“The projection for fuel is that is going to increase,” she said. “We are also announcing a fuel surcharge [last Monday]. So those two components of fuel will be a bonus to RPP as we head toward the back half. We also are going to have a pretty picky peak, we anticipate for fewer operating days this year than last, which means the demand surcharge should be pretty strong this year compared to last year.”