U.S. Retailers Face Record Holiday Delivery Prices: Ground Rates Up 5.8% and Express Up 13.8% as Fuel Surcharges Climb
According to Reuters, the most expensive parcel shipping year on record in the United States is on track to end with the highest-ever holiday season delivery prices, as soaring diesel prices drive even higher fuel surcharge rates from UPS and FedEx. According to the TD Cowen/AFS Freight Index, which analyzes data from about 1,800 shippers including major retailers, pricing for ground deliveries in the fourth quarter is expected to be 5.8% higher than the same period last year, while pricing for speedier express parcel deliveries is forecast to jump 13.8%. Holiday-related package volume can double during the fourth quarter.
The U.S. average on-highway diesel price was $6.28 per gallon as of October 19, according to the Energy Information Administration (EIA), up 65% since the United States and Israel attacked Iran on February 28. But diesel price increases account for just under 30% of the fuel surcharge cost, said Mingshu Bates, chief analytics officer at AFS Logistics. Surcharges driven by changes to how UPS and FedEx calculate them are rising far faster than fuel prices, and go up even when fuel prices do not, she said.
Reuters noted that when diesel was $2.91 per gallon in the first quarter of 2021, the index fuel surcharge was 7.75% of the base shipping rate; even if diesel returned to that price, the surcharge now would be 23.75%, roughly three times higher, reflecting how changes in surcharge calculations are raising carriers' revenue. Based on company surcharge tables at the EIA average diesel price, UPS's fuel surcharge is 29.5% and FedEx's is 29%.
The changes are boosting costs for retailers heading into the year's most important selling season.
Source: GSM · USA (original Chinese edition)
Photo: 图：UPS 干线货车在德克萨斯州 Arlington 的配送中心（资料图）。照片：美国农业部，公共领域，经 Wikimedia Commons。Photo: A UPS semi-trailer truck at a distribution center in Arlington, Texas (file photo). Photo: U.S. Department of Agriculture, public domain, via Wikimedia Commons.
