In today's blog post, we'll compare the new surcharges with previous ones, let you know when these changes go into effect, and share the number one way you can save money — even amid new fuel surcharges.

Didn't we talk about this recently?

You're not experiencing déjà vu. UPS and FedEx imposed increased fuel surcharges six months ago— by 50 and 100 basis points, respectively.

How significant are these new charges?

On April 29, UPS increased the markup percentage on its domestic Ground, Air, and SurePost fuel surcharge tables by 50 points. To avoid being left behind, FedEx raised its US Ground and Express fuel surcharge tables by 100 points on May 6. On second thought, this does feel a whole lot like déjà vu.

As UPS's CFO, Brian Newman, pointed out in their Q1 2024 earnings call, "A decline in fuel surcharge revenue, combined with a stronger US dollar, negatively impacted the revenue per piece growth rate by 80 basis points." While it's a relief for shippers to see lower fuel charges, the carriers have been struggling without the cushion of additional fuel surcharges. This just goes to show that fuel surcharges have less to do with fuel costs and more to do with increasing profits.

Do you need further proof that fuel surcharges are imposed to help the bottom line, not just cover fuel charges? UPS CEO Carol Tomé says, "fuel prices were a drag on the RPP in the first quarter. The projection for fuel is that [it] is going to increase. We are also announcing a fuel surcharge later today. So those two components of fuel will be a bonus to RPP as we head towards the back half."

Are fuel surcharges for everyone?

In the UPS earnings call, Tomé clarified, "this is not atypical for us to adjust our surcharge on the base of rising fuel costs. You also should know that, that doesn't impact all of our customers. Clearly, some are exempted from this." However, she doesn't elaborate on who won't need to pay or how to secure these exemptions.

One way to see lower shipping costs is through ShipRx parcel audits. Using our best-in-class software, we automatically run checks on every parcel you send, verifying over 40 factors to discover service failures and incorrect charges, generating refunds on your behalf.

A five-minute set-up (no credit card required) can yield refunds of 1-5% on every invoice. Since the carriers impose time limits on refund requests, staying up-to-date with your parcel audits is something you can't afford to miss.

Set up your parcel audit now, and you won't pay a cent until you start saving money.