In the dynamic world of shipping and logistics, staying informed about changes in fuel surcharges is crucial for businesses and consumers alike. UPS is implementing this week (beginning December 4, 2023) a 0.5% increase in the Ground Domestic Fuel Surcharge. Here is what you need to know about these adjustments.
The UPS Ground Domestic Fuel Surcharge affects various services, including UPS Ground, UPS Ground with Freight Pricing, UPS Hundredweight Ground Service, UPS SurePost and UPS Basic. This increase is a response to the rising costs associated with fuel and is part of UPS’s strategy to manage operational expenses.
Note: The fuel surcharge doesn’t just apply to base shipping rates; it also influences other surcharges, such as Peak/Demand Surcharges, Delivery and Pickup Charges, Residential Surcharges and more. This interconnected nature means that the adjustment can have a broader impact on the overall cost of shipping services.
In addition to the domestic changes, the International Ground Export Import Fuel Surcharge table will also see a 0.5% increase on December 4, 2024. This adjustment will apply to UPS Standard shipments to/from Canada and UPS Standard shipments to/from Mexico.
When comparing historical trends fuel surcharges for national ground services have experienced a substantial 75% increase since Q4 2021. UPS made FIVE index changes in 12 months from April 2021 to April 2022 increasing the ground charge by almost 60% and now this is the sixth change to the index in over twenty months. Understanding this historical context provides insight into the challenges faced by logistics companies in managing fuel-related costs.
For businesses that heavily rely on shipping services, you need to assess your transportation budget and strategies. You can mitigate some of the impact by considering optimizing shipping routes, exploring alternative carriers or negotiating contracts to mitigate the impact of rising fuel surcharges.
The UPS Ground Domestic Fuel Surcharge increase highlights the ongoing challenges in the logistics industry. As fuel costs fluctuate, businesses and consumers should stay informed to make well-informed decisions. Navigating these changes requires a proactive approach to logistics management, ensuring that shipments remain efficient and cost-effective in an evolving landscape.
And don’t discount the opportunity FedEx may see here. FedEx made a similar change to International only on November 20, 2023 by increasing 1.5 points. With the consideration that UPS applied the change universally keep an eye out for FedEx to come back and apply the change to domestic as well.