US retailers face record holiday delivery prices from surcharges tied to costlier diesel
UPS•Fourth-quarter ground delivery pricing is forecast to rise 5.8% year over year, while express pricing is forecast to jump 13.8%. At diesel prices of $6.28 per gallon, UPS and FedEx fuel surcharges are 29.5% and 29%, respectively.
1. Holiday delivery costs rise
US retailers are on track to face the most expensive holiday-season delivery prices on record as higher diesel prices and carrier fuel surcharges raise shipping costs. Ground delivery pricing is expected to be 5.8% higher year over year in the fourth quarter, while express parcel pricing is forecast to rise 13.8% from the fourth quarter of 2025.
2. Surcharges exceed fuel increases
At the US average diesel price of $6.28 per gallon as of October 19, UPS's fuel surcharge is 29.5% and FedEx's is 29%. Diesel price increases account for just under 30% of fuel surcharge costs, while changes in carrier calculations have also raised surcharges. The USPS charges an 8% fuel surcharge on most packages, and Amazon added a 3.5% fuel and logistics-related fee to sellers' fulfillment fees. Analysts said switching delivery companies can be difficult because volume discounts may be lost and holiday plans are set months ahead.
