Dive Brief:
- UPS has rolled out a barrage of surcharge changes since May that could introduce further pricing pressure for shippers.
- The carrier has hiked its fuel fee calculations, added a new international levy and tweaked the list of ZIP codes in which delivery area surcharges apply, among other adjustments. Updates to how fees on bulky packages are calculated will take effect Aug. 17.
- "UPS rate updates help to support ongoing expansion and capability enhancements as we strive to maintain the high service levels you expect from UPS," the company said on its website.
Notable UPS fee changes in 2025
| Surcharge | What’s changing | Effective date |
|---|---|---|
| International Fuel Surcharge | Fuel surcharge calculations increased for ground and air imports and exports. | May 12 |
| Domestic Fuel Surcharge | Fuel surcharge calculations increased for ground, air and Ground Saver packages. | May 26 |
| Delivery Area Surcharge | List of ZIP codes the fee applies to changed. | June 1 |
| International Collect on Delivery Fee | The new $12 fee is charged to the U.S. consignee, unless duties and taxes are billed to a UPS account or paid electronically prior to delivery. | June 2 |
| Additional Handling and Large Package Surcharges | Higher fees for Zone 7 and above shipments began applying. | June 2 |
| Remote Area Surcharge | Ground Saver deliveries now have this fee applied to ZIP codes deemed as remote areas in the contiguous U.S. | June 2 |
| Domestic Large Package Surcharge | No longer calculated based on length plus girth. Instead, packages weighing over 110 pounds or with a size greater than 17,280 cubic inches will be subject to the fee. | Aug. 17 |
| Domestic Additional Handling Charge | No longer calculated based on length plus girth. Instead, packages with a size greater than 8,640 cubic inches will be subject to the fee. | Aug. 17 |
Source: UPS
Dive Insight:
UPS and rival FedEx have accelerated the frequency of surcharge changes over the past few years in a bid to boost profitability, experts have told Supply Chain Dive. Although discounts offered by the delivery giants are softening the blow, the fee hikes are contributing to customers' higher shipping expenses.
"You keep getting these changes forced into this network, and you haven't budgeted for it, along with all of the other stuff you're dealing with as a shipper, and it is difficult," said Adi Karamcheti, a senior consultant of professional services at Shipware.
Fuel surcharges have been a particular thorn in shippers' side recently, with several increases levied since 2024.
UPS increased its fuel surcharge calculations for domestic shipments by 100 basis points on May 26. The carrier adjusts the index-based fees weekly based on average diesel fuel and jet fuel prices. Those prices determine the surcharge rate UPS applies for deliveries.
This means if the diesel fuel index's price per gallon is $3.20, a UPS Ground or Ground Saver delivery now incurs an 18.75% fee instead of a 17.75% markup under previous calculations. The move comes less than three months after UPS increased its domestic fuel surcharge calculations by 50 basis points.
Beyond fuel prices, UPS customers need to keep up with upcoming changes to how large package and additional handling fees are calculated. Now those surcharges consider a package's cubic inch total rather than a combination of length and girth.
Shippers with bulkier items, like patio furniture, aftermarket car parts or recreational equipment, should pay extra attention to how the new calculations will influence what charges apply and when, said Gene Pawlak, who is also a senior consultant of professional services at Shipware.
Shippers have ways to blunt the impact of rate and fee hikes, according to a post on the website of Reveel, a parcel spend management provider. This includes focusing contract negotiations on the surcharges they are most heavily exposed to, minimizing empty space when packaging products and leveraging warehouses closest to end customers.
