What Is a Fuel Surcharge?
A fuel surcharge is a variable percentage added to the base transportation charge of every parcel shipment. It’s designed to offset fluctuating fuel costs — diesel for ground trucks and jet fuel for air freight.
Unlike most surcharges (which are flat dollar amounts), fuel surcharges are calculated as a percentage of your base rate. This means fuel surcharges increase proportionally with the size and distance of your shipment.
How Fuel Surcharges Are Calculated
Both UPS and FedEx publish fuel surcharge tables that link the current price of fuel to a surcharge percentage. The tables are updated weekly, typically on Mondays.
The Fuel Index
- Ground shipments: Based on the U.S. Department of Energy’s National Average Diesel Fuel price, published weekly.
- Air/Express shipments: Based on the DOE’s Gulf Coast Jet Fuel spot price or equivalent aviation fuel index.
Each carrier has a lookup table that maps fuel price ranges to surcharge percentages:
Sample Ground Fuel Surcharge Table (2026)
| Diesel Price (per gallon) | UPS Ground Surcharge | FedEx Ground Surcharge |
|---|---|---|
| $2.50–$2.75 | 7.50% | 7.50% |
| $2.75–$3.00 | 8.00% | 8.00% |
| $3.00–$3.25 | 8.50% | 8.50% |
| $3.25–$3.50 | 9.50% | 9.50% |
| $3.50–$3.75 | 10.50% | 10.50% |
| $4.00–$4.25 | 12.50% | 12.50% |
| $5.00+ | 18.00%+ | 18.00%+ |
Sample Air/Express Fuel Surcharge Table (2026)
| Jet Fuel Index | UPS Air Surcharge | FedEx Express Surcharge |
|---|---|---|
| $2.00–$2.25 | 14.50% | 14.50% |
| $2.25–$2.50 | 16.00% | 16.00% |
| $2.50–$2.75 | 17.50% | 17.50% |
| $3.00+ | 21.00%+ | 21.00%+ |
Note: Actual fuel tables are published by each carrier and updated for each year.
How Fuel Surcharges Are Applied
The fuel surcharge is calculated on the base transportation charge — either published or discounted, depending on your agreement:
Example: 15 lb Ground shipment, Zone 5
| Published | With 45% Discount | |
|---|---|---|
| Base rate | $17.40 | $9.57 |
| Fuel surcharge (8.5%) | $1.48 | $0.81 |
| Total (before other surcharges) | $18.88 | $10.38 |
Because fuel is a percentage of the (lower) discounted rate, having a larger base rate discount also reduces your absolute fuel cost.
Why Fuel Surcharges Keep Going Up
Over the past decade, carriers have expanded their fuel surcharge tables to generate more revenue, regardless of actual fuel prices:
- Lower floor prices: The surcharge kicks in at a lower fuel price than it used to, meaning shippers pay a surcharge even when fuel is relatively cheap.
- Steeper percentages: The surcharge percentage for each price band has increased over time.
- Delayed decreases: When fuel prices drop, carriers are slow to reduce the surcharge — but when prices increase, the surcharge goes up immediately.
In 2026, UPS increased its ground fuel surcharge formula, and FedEx followed with similar adjustments. Ground fuel surcharges reached 25% and domestic air surcharges hit 25.5% during peak periods in early 2026.
Ground vs. Air Fuel Surcharges
It’s important to understand that ground and air services have separate fuel surcharge tables:
| Service Type | Fuel Index Source | Typical Range (2026) |
|---|---|---|
| Ground / Home Delivery | DOE Diesel price | 7.5–25% |
| Air Express (NDA, 2DA, 3DS) | Jet fuel index | 14.5–25.5% |
| International Express | Jet fuel index | 14.5–25.5% |
Air services carry higher fuel surcharges because jet fuel is more expensive per unit and air transport is more fuel-intensive.
Can You Negotiate Fuel Surcharges?
Fuel surcharges are among the hardest surcharges to negotiate. Most carriers treat them as passthrough costs that are non-negotiable. However, some options exist:
- Fuel surcharge caps: Some large-volume shippers negotiate a maximum fuel surcharge percentage.
- Fixed fuel rate: Rarely, carriers will offer a fixed fuel rate for a contract period.
- Base rate offset: Even if you can’t reduce the fuel percentage, a larger discount on the base rate reduces the dollar amount of fuel (since it’s a percentage of the base).
How to Minimize Fuel Surcharge Impact
Since you can’t control fuel prices, focus on reducing the base rate that fuel is calculated against:
- Negotiate deeper base discounts — A lower base rate = lower fuel dollar amount
- Shift volume to Ground — Ground fuel surcharges are lower than air
- Consolidate shipments — Fewer shipments = fewer fuel surcharges applied
- Ship earlier — Avoiding expedited services reduces both the base rate and the higher air fuel surcharge
The Bottom Line
Fuel surcharges are a fact of life in parcel shipping. They add 7–25% to every shipment, change weekly, and are designed to always generate revenue for carriers regardless of actual fuel costs. The best defense is a strong base rate discount (which reduces the fuel dollar amount) and a strategic shift toward ground services where possible.
Want to see how much fuel surcharges are costing you? Upload one invoice to ShipMint’s Instant Analysis for a complete surcharge breakdown — free.