Fuel is the only surcharge that applies to every small package that is shipped. While there are a plethora of other surcharges, they are only applied for certain reasons. A residential surcharge is only applied if the package is shipped to a residential address. An additional handling surcharge is only applied when a package exceeds a specific size or weight. But the fuel surcharge is applied to every package.
The price of fuel is constantly changing so FedEx and UPS update their fuel surcharge percentage on a weekly basis. Fuel is always a percentage of the cost of the transportation charge combined with a number of other surcharges like the residential surcharge mentioned previously.
The Ground fuel surcharge percentage is based on the U.S. On-highway Average price for a gallon of diesel fuel. You can see in the table below that this changes every week. This weekly charge is then compared to the FedEx or UPS Ground fuel surcharge table to determine what percentage rate should be applied for that week’s billing.
The same methodology is used for Express shipments but with the U.S. Gulf Coast (USGC) spot price for a gallon of kerosene-type jet fuel used as an index.
To learn how to reduce the impact of fuel on your parcel spend, contact our parcel experts.