FedEx and UPS have implemented fuel surcharge rate increases and introduced new shipping fees this month, affecting a broad range of international shipments for customers. According to a report from Supply Chain Dive, the carriers are now applying temporary fees for shipments between the U.S. and numerous countries until further notice. One example is a UPS surcharge of 32 cents per pound for volume entering the U.S. from any origin country or territory, except those where a surge emergency fee is already in place.

Read also: FedEx Launches Reusable Packaging System for Business Shippers

In a customer notice, UPS stated its aim is to maintain the quality and timeliness of service while meeting shipping needs. Both FedEx and UPS are also raising their fuel fee calculations on import and export services. For instance, if jet fuel costs $4 per gallon in a given week, FedEx will apply a 38.5% fuel surcharge for international exports, an increase from the previous 36.5% rate at that fuel price. Separately, DHL eCommerce is set to increase its fuel surcharge calculations for domestic products on May 30.

The latest wave of surcharge hikes adds to ongoing cost pressures for parcel shippers, as logistics companies pass on increased expenses. Surcharges linked to fuel prices have risen amid the Iran war and disruptions in the Strait of Hormuz, which continue to squeeze global oil supply. On an April earnings call, UPS Executive Vice President and Chief Financial Officer Brian Dykes explained that the company manages fuel through fuel surcharges, noting that its indexes protect profits from impact, unlike passenger airlines.

UPS and FedEx have adjusted the rates behind their fuel surcharges several times in recent quarters, escalating their impact when the fuel prices they are tied to increase, according to parcel spend consultants. The TD Cowen/AFS Freight Index reported that ground fuel surcharges rose 26.7% year over year in the first quarter, outpacing a 10% increase in diesel fuel prices.

Experts suggest that shippers can limit the impact of fuel surcharges through negotiated discounts, reducing other parcel-related costs, or exploring alternative carrier options. For international fuel fee hikes from UPS and FedEx, shippers are advised to update their cost models and landed-cost calculations to understand the impact, and to cross-reference the companies’ increases to assess exposure at the carrier level, according to ShipScience.

Source: IndexBox Market Intelligence Platform