You might assume the FedEx fuel surcharge is directly tied to the price of fuel, but that’s not the full picture anymore. Carriers have started using these surcharges as a tool to build in extra revenue, even when fuel prices are stable or decreasing. This practice, known as “decoupling,” means the logic you might apply to other business costs doesn’t work here. These fees are now being used to cover other internal operational costs, from fleet maintenance to expanded delivery networks. For shippers, this strategic shift makes it more challenging than ever to forecast expenses and protect your margins without a deep understanding of your carrier agreement.
Fuel charges are rising at FedEx, and you may not know this from your daily shipping reports. As of March 18, the surcharges for FedEx Express and FedEx Ground services rose to 7% or higher, and are the highest they’ve been in all of 2019.
How Is the FedEx® Fuel Surcharge Calculated?
The FedEx fuel surcharge rates change depending on the fluctuating price of fuel per gallon (jet fuel for FedEx Express and diesel fuel for FedEx Ground). The FedEx Express surcharges are based on U.S. Gulf Coast (USGC) spot price per gallon of a kerosene-type jet fuel. For FedEx Ground, that rate is tied to the weekly published national U.S. on-highway average diesel fuel price per gallon. Each week there’s a lag between the fuel price index date and the fuel surcharge posting on the FedEx site. For example, surcharges for the week of April 8-14 are based on weekly fuel prices reported on March 29 for FedEx Express, and April 1 for FedEx Ground. The surcharge changes are effective each Monday, with the surcharge percentage available the previous Friday. FedEx says that the surcharge percentages are subject to change without notice, per their terms and conditions. Here’s what you can expect for FedEx Express and FedEx Ground surcharges going forward, based on our experience. The FedEx Express fuel surcharge increase will probably range from 15% to 25% throughout this year, fluctuating by week. FedEx Express service fuel surcharge rates apply to U.S., U.S. export, U.S. import and U.S. to Puerto Rico shipments. Domestic rates for fuel surcharges for the weeks of April 1-7 and April 8-14 were 7.5% for domestic and Puerto Rico shipments, 8.5% for export, and a whopping 10.25% for import. The export and import rates were actually not the highest for this year, with import rates going as high as 9% and export rates topping out at 10.75%. The Ground fuel surcharge increase will likely stay very close to a 4% increase throughout this year. Surcharge rates for the weeks of April 1-7 and April 8-14 were 7%, up a quarter percent from the previous two weeks.
A Look at Recent and Upcoming Surcharge Increases
If you feel like you’re paying more for shipping, you’re not just imagining it. FedEx has been rolling out a series of surcharge increases that directly impact your bottom line. These aren’t minor adjustments; they represent a clear trend of rising costs that high-volume shippers need to monitor closely. Understanding these changes is the first step toward protecting your budget from unexpected expenses. The increases affect a wide range of services, meaning very few shipments are left untouched. Let’s break down the two most significant recent hikes so you can see exactly what’s changing and when.
The June 2025 Fuel Surcharge Hike
On June 9, 2025, FedEx implemented a notable increase in its fuel surcharge rates. This wasn’t limited to a single service; the hike applied across the board to FedEx Ground, Home Delivery, International Ground, and both domestic and international package services. This broad application means that whether you’re shipping across the state or across the globe, your costs have likely gone up. It’s a critical reminder that the base rate for a shipment is only part of the story. Surcharges, especially for fuel, can add a significant percentage to your final bill, making it essential to reduce high-volume shipping costs through careful planning and analysis.
The December 2025 Record-High Surcharges
Just when shippers thought they had a handle on the new rates, FedEx announced another increase scheduled for December 1, 2025. This upcoming change is particularly significant because it’s set to push the fuel surcharges for Ground services to their highest point ever. Hitting a record high signals a new baseline for shipping expenses and reinforces the need for a proactive strategy. Relying on last year’s budget or carrier agreements may no longer be enough to keep your logistics spend in check. This trend highlights the importance of regularly reviewing and negotiating your carrier contracts to account for these new market realities.
The “Why” Behind the Hikes: It’s Not Just About Fuel
You might assume that a “fuel surcharge” is directly tied to the price of fuel, but that’s not the full picture. Recently, carriers have started using these surcharges as a tool to build in extra revenue, regardless of what’s happening at the pump. FedEx has been raising its fuel surcharges even during periods when fuel prices were decreasing. This strategic shift means that surcharges are becoming less about covering a specific variable cost and more about padding the profit margin on each shipment. This makes it more challenging than ever to forecast your shipping spend accurately without a deep understanding of your carrier agreement’s fine print.
Decoupling Surcharges from Fuel Prices
The strategy of raising fuel surcharges while actual fuel costs are stable or even falling is what we call “decoupling.” It’s a deliberate move by carriers to increase their revenue. For shippers, this means the logic you might apply to other business costs doesn’t work here. You can’t simply watch the oil market to predict your shipping expenses. Instead, you have to treat the surcharge as another negotiable rate. This is where expert contract optimization becomes invaluable, as it helps you challenge these opaque pricing structures and secure more favorable terms that reflect true market conditions.
Passing on Operational Costs
So, if not just fuel, what are these surcharges covering? In many cases, they are being used to offset other operational costs. For instance, recent reports indicate that issues within FedEx’s airplane fleet, specifically with their MD-11 aircraft requiring safety checks, have contributed to these increases. Essentially, shippers are being asked to cover the costs of the carrier’s internal operational and maintenance challenges. While every business has overhead, having these costs passed on through vaguely defined surcharges can feel frustrating and make it difficult to manage your own budget effectively.
It’s Not Just Fuel: Other FedEx Fees on the Rise
The fuel surcharge is getting a lot of attention, but it’s not the only fee that’s creeping up. FedEx has also been increasing other accessorial charges that can easily go unnoticed if you’re not carefully auditing your invoices. These smaller, individual fees can add up to a substantial amount, especially for businesses shipping thousands of packages a month. From charges for delivering to certain areas to penalties for late payments, the carrier is finding new ways to generate revenue from its existing services. Staying on top of these changes requires constant vigilance and a robust system for tracking your shipping data.
Expanded Delivery Area Surcharges
One of the more subtle increases comes from the expansion of Delivery Area Surcharges (DAS). FedEx has been adding new ZIP codes to its list of areas that incur an extra fee for delivery. This means a location that wasn’t considered “extended” or “remote” last year might be today, automatically adding a surcharge to every package you send there. Without a thorough invoice audit and recovery process, these incorrect or newly applied charges can easily slip through, slowly eroding your profit margins over time. It’s a quiet but effective way for the carrier to increase the cost per shipment.
Increased Late Payment Penalties
Managing cash flow is a challenge for any business, and FedEx has made it a little tougher. On June 1, 2025, the company raised its late payment fee from an already high 8% to an even more punishing 9.9% of the total overdue amount. This change puts extra pressure on accounts payable teams to process and pay shipping invoices on a tight schedule. For large companies with complex billing and approval processes, this seemingly small percentage increase can translate into thousands of dollars in unnecessary penalty fees over the course of a year, making efficient payment management more critical than ever.
How Rising Fuel Surcharges Impact Your Bottom Line
Without knowing it, your shipping rates just went up this year, and there’s no carrier bulletin that will make this announcement to you. For companies with thin margins, these fuel surcharge increases will impact your bottom line in a big way. It’s more serious, of course, for the FedEx Express rates, with a larger increase than Ground rates, but even a 4% increase is a big deal. For companies shipping a high volume of expedited packages, the 15-25% fuel surcharge will really hurt. Of course, there are ways to stave off carrier increases or at least protect your contracts so you’re not paying more than you need to. Two options to consider are getting expert negotiation help, and auditing your carrier bills automatically. Parcel and Freight Contract Negotiation: Without access to pricing expertise and inside knowledge of what discounts carriers will negotiate, it’s hard for shipping companies to make a dent in their contract terms. With former carrier executives on staff, Shipware can conduct the actual negotiations or coach your team through them. Freight Invoice Audit: Your company is likely missing earned discounts and refund credits, that won’t be given to you without filing a claim. Shipware’s AI software scours shipping invoices to find and file for those refunds, without disturbing your company’s process or costing you time. We save clients 10-30% on their shipping invoices, with fees coming out of the savings. 
Actionable Strategies to Mitigate Rising Shipping Costs
While rising surcharges can feel like an unavoidable cost of doing business, you have more control than you might think. Instead of simply absorbing these new expenses, you can take proactive steps to protect your margins. By focusing on your carrier agreements, shipping mix, and internal operations, you can build a more resilient and cost-effective shipping strategy. These adjustments not only counter the immediate impact of fuel surcharge hikes but also position your business for long-term savings and efficiency. Let’s look at a few practical strategies you can implement right away.
Negotiate Surcharge Caps and Waivers in Your Contract
Your carrier agreement isn’t set in stone; it’s a starting point for discussion. One of the most effective ways to control volatile costs is to negotiate caps on specific surcharges, including fuel. This creates a ceiling, ensuring that even if the carrier’s index rate skyrockets, your costs remain predictable. In some cases, high-volume shippers can even negotiate to have certain surcharges waived entirely. As one industry report notes, “Understanding these charges is very important for businesses to create accurate budgets and manage their money well.” To negotiate effectively, you need data. Leveraging insights to benchmark discounts on what similar shippers are paying gives you the leverage needed to secure more favorable terms and protect your bottom line.
Diversify Your Carrier Mix with Regional Options
Relying exclusively on one or two national carriers can leave you vulnerable to their pricing strategies. Adding regional carriers to your mix can be a game-changer. These carriers often provide excellent service within their specific geographic footprints, sometimes at a lower cost and with fewer or less expensive surcharges. This strategy is especially effective because, as Supply Chain Dive points out, “Even if shippers get discounts on regular rates, these extra fees can eat up those savings.” By implementing a carrier diversification strategy, you not only introduce competition that can lower your rates with national carriers but also build a more flexible and resilient logistics network.
Optimize Packaging and Consolidate Shipments
Not all cost-saving measures involve your carrier contract. Making smart changes to your internal fulfillment process can yield significant savings. Focus on optimizing your packaging to eliminate wasted space and avoid dimensional weight penalties, which can inflate costs unexpectedly. Whenever possible, consolidate multiple orders heading to the same destination into a single shipment. This reduces your per-package costs, including the associated fuel surcharges. With carriers making frequent fee changes, it’s becoming “harder for shippers to save money,” making these operational efficiencies more critical than ever. A thorough review of your processes can help reduce distribution and fulfillment costs from the inside out.
Understanding the Broader Shipping Industry Context
FedEx’s fuel surcharge increases aren’t happening in a vacuum. They are part of a larger industry trend where carriers are becoming more sophisticated in how they manage pricing and profitability. Understanding this context is key to anticipating future changes and developing a shipping strategy that can adapt and thrive. Carriers are moving away from relying solely on annual rate increases and are instead using surcharges as a flexible lever to adjust to market conditions, operational costs, and demand. This shift requires shippers to be more vigilant and data-driven than ever before. By looking at the bigger picture, you can move from a reactive to a proactive stance in managing your shipping spend.
Fuel Surcharges as an Industry-Wide Practice
While this discussion focuses on FedEx, it’s important to recognize that fuel surcharges are a standard practice across all major carriers, including UPS and DHL. These fees are designed to help carriers manage the unpredictable cost of fuel, which can fluctuate dramatically. As one report highlights, “Fuel surcharges are a major part of shipping costs and can change weekly.” This volatility makes them a critical line item to monitor. Carriers often tie these surcharges to public fuel price indexes, but the formulas they use can be complex and may not always directly correlate with the price you see at the pump. This is why having a robust spend management portal is essential for gaining true visibility into these ever-changing costs.
The Trend of Frequent, Incremental Price Changes
In the past, shippers could largely plan their budgets around a single General Rate Increase (GRI) each year. Today, the pricing landscape is far more dynamic. Carriers are increasingly using surcharges to implement more frequent, incremental price adjustments throughout the year. These changes often fly under the radar but can have a substantial cumulative effect on your total shipping costs. These increases are widespread, applying to “many services, including FedEx Ground, Home Delivery, International Ground, domestic package services, and international shipping.” This strategy makes historical data less reliable for forecasting and requires a more active approach to monitoring and analyzing your carrier invoices to catch these subtle but costly changes.
What to Expect from Future Carrier Pricing Models
All signs point to this trend of dynamic pricing continuing and likely accelerating. Carriers will keep using surcharges as a tool to manage their margins and respond to economic shifts without overhauling their entire rate structure. For example, projections suggest, “The FedEx Express fuel surcharge increase will probably range from 15% to 25% throughout this year, fluctuating by week.” This level of volatility is the new normal. For shippers, this means the days of securing a good contract and letting it run for years are over. Continuous monitoring, regular contract reviews, and a data-backed strategy are no longer optional—they are essential for survival and success in this evolving shipping environment.
Frequently Asked Questions
Why are my fuel surcharges increasing even when fuel prices seem stable? It’s a common assumption that fuel surcharges are tied directly to the price of fuel, but that’s not the whole story anymore. Carriers now use these surcharges as a flexible way to cover a wide range of operational costs, from fleet maintenance to network expansions. This means the fee is less of a direct reflection of fuel market prices and more of a tool for carriers to protect their own profit margins.
Is this trend of rising surcharges unique to FedEx? While this post focuses on FedEx, this is an industry-wide shift. All major carriers use surcharges to manage their profitability and respond to changing economic conditions. The strategy of using these fees to make frequent, smaller price adjustments throughout the year, rather than relying on one big annual increase, has become standard practice across the board.
My shipping contract is already in place. Can I still do something about these fees? Absolutely. Your carrier agreement should be seen as a living document, not something set in stone. You can and should renegotiate terms, especially when market conditions change. A great strategy is to negotiate for caps on specific surcharges, which creates a ceiling on how high your costs can go. This gives you predictability even when the carrier’s rates fluctuate.
Besides fuel, what other hidden fees should I be watching for? Fuel surcharges get the most attention, but other fees can quietly inflate your shipping spend. Keep a close eye on Delivery Area Surcharges, as carriers frequently add new ZIP codes to the list of areas that incur an extra fee. Also, be mindful of late payment penalties, which have been increasing and can add a significant percentage to an overdue invoice.
How can I better forecast my shipping costs if these surcharges are so unpredictable? Forecasting has become more challenging, but it’s not impossible. The key is to shift from a passive approach to active management. Instead of relying on last year’s data, you need real-time visibility into your spending. Regularly auditing your invoices helps you catch new fees, while analyzing your shipping data can reveal opportunities to secure better contract terms, like surcharge caps, that create more cost stability.
Key Takeaways
- Treat Fuel Surcharges as Negotiable Profit Centers: Carriers now use fuel surcharges to cover various operational costs, not just the price at the pump. Approach these fees as a negotiable line item in your contract, not a fixed cost you have to accept.
- Audit Invoices for More Than Just Fuel Fees: Your total shipping cost is rising due to more than just fuel. Carriers are increasing other accessorial charges, like delivery area surcharges and late payment penalties, which add up significantly if you’re not auditing every invoice.
- Build a Defense with a Three-Part Strategy: Protect your budget by negotiating surcharge caps directly into your contract, introducing regional carriers to create pricing leverage, and optimizing your internal packaging and consolidation processes to lower costs from the inside out.