Dive Brief:
- FedEx increased its fuel surcharge calculations on Monday, adding to the list of fee adjustments the logistics giant has made so far this month.
- The fuel surcharge hikes — generally around 200 basis points — apply to FedEx Ground, Home Delivery, International Ground, domestic package services and international imports and exports. Additionally, U.S. express freight services now have a higher per-pound surcharge rate.
- FedEx sets its fuel fee prices each week, adjusting it based on average diesel and jet fuel costs. With the calculation changes, if the per-gallon price of diesel fuel is $3.74, a FedEx Ground shipment now incurs a 20.5% surcharge on fuel instead of an 18.5% surcharge.
Dive Insight:
FedEx's fuel surcharge adjustments build upon ongoing pricing pressures that parcel shippers have seen over the past year. Frequent fee additions, increases and changes among major carriers are eating into rate discounts shippers have secured in a competitive market.
"Over the past 18 months, FedEx and UPS have pursued a different strategy as they fight for revenue in a low demand environment, with more frequent, subtle pricing changes that take effect more quickly," according to April's TD Cowen/AFS Freight Index.
Fuel surcharge calculations tweaks have been common during this stretch. From Q1 2024 to Q1 2025, FedEx's ground fuel surcharge jumped 12% as a result of the changes, despite diesel fuel prices falling by 8.4% over the same period, per the index.
Beyond fuel fee tweaks, FedEx increased its late payment fee from 8% to 9.9% of the total past-due invoice balance on June 1.
The following day, FedEx also changed which ZIP codes its delivery area surcharge applies to. Now, deliveries to several ZIP codes in communities such as Abilene, Texas, and the Oregon cities of Eugene and Salem will be subject to the per-package surcharge.
FedEx's moves follow similar actions by rival UPS, which has increased its fuel surcharges, changed where its delivery area surcharge applies and announced upcoming tweaks to how fees on bulky packages are calculated.
