Shipping Surcharges Are Up in 2025: Here's How to Keep Costs Down

Navigating 2025 Carrier Surcharges

The shipping landscape is evolving, and with it, carrier surcharges continue to rise. As we enter 2025, businesses must remain vigilant about these additional fees imposed by carriers like FedEx, UPS, USPS and DHL. 

In addition to the 5.9% GRI (General Rate Increase) for 2025 by UPS and FedEx, these shipping carriers are constantly hitting you with additional fees, also known as “Surcharges.” Which are not accounted for in the “5.9%” GRI by the carriers.

What are Shipping Surcharges?

A shipping surcharge is an additional fee that carriers (such as FedEx and UPS ) charge on top of standard shipping rates. These surcharges help cover extra costs incurred due to specific shipping conditions.

Most Common Types of Shipping Surcharges: 

• Fuel Surcharge – Adjusts based on fluctuating fuel prices. This can change on a weekly basis.
• Residential Delivery Surcharge – Applied when delivering to a home address rather than a business.
• Large Package/Oversize Surcharges – For large or bulky packages that exceed size limits.
• Additional Handling Surcharge – For shipments requiring special handling due to size, weight, or packaging.
• Demand Surcharge – Applied during high-demand periods (e.g., holidays).
• Remote Area Surcharge – For deliveries to rural or hard-to-reach locations—including major metropolitan cities.
• Address Correction Fee – Applied when a shipper enters an incorrect delivery address.
• Credit Card Surcharge – Applied when invoices are paid using a credit card.

Everything You Need to Know About 2025 Surcharges

Carriers adjust their surcharge structures to account for operational costs, inflation, and market fluctuations. Let's breakdown the most significant surcharges and their potential impact on businesses in 2025.

Increased Fuel Surcharges

With continued volatility in fuel prices, FedEx and UPS have adjusted their fuel surcharge index, leading to higher costs per shipment. Businesses shipping frequently or long distances will see noticeable price increases. Planning routes strategically and negotiating fuel-related costs will be critical. Please be aware that FedEx and UPS will adjust the Fuel Surcharge AGAIN, Effective Feb. 10, 2025. 

Residential Delivery Surcharges

As e-commerce continues to boom, residential delivery surcharges have increased to account for last-mile logistics complexities. This fee is especially important for businesses fulfilling direct-to-consumer (DTC) orders. Companies should explore hybrid fulfillment options or negotiate volume-based discounts to offset these charges.

Last-mile delivery—the final leg of a package’s journey from a distribution hub to a customer’s doorstep—is one of the most expensive and challenging aspects of shipping. Shippers who relied on SurePost for small packages now face higher costs and potential delivery delays. Learn more about the UPS SurePost changes, effective January 13, 2025.

Remote Area Surcharges

FedEx and UPS have updated their delivery area surcharge (DAS) zones, increasing fees for shipments to rural and remote areas. Many people assume DAS only applies to rural areas, but that's not the case. Certain zip codes in major cities like New York, Chicago, and Los Angeles also fall under DAS. This is due to high delivery traffic and limited access, making these urban locations just as challenging for carriers as remote areas. In short, DAS applies to any hard-to-reach area, whether rural or within a major metropolitan city. UPS SurePost Delivery

• UPS SurePost Delivery Area Surcharge (DAS): Increasing by 61.8% from $3.80 to $6.15
• UPS SurePost Extended DAS: Increasing by 69.4%, from $4.90 to $8.30

Businesses serving customers in these locations should analyze regional distribution centers and consider alternative carriers for cost savings.

Large Package Oversize Surcharges & Additional Handling Surcharges

Oversized and heavy packages continue to attract surcharges, with carriers becoming stricter about dimensional weight pricing. Both FedEx and UPS have nearly doubled their surcharges for large and oversized packages in recent years. These went up substantially in 2025, and continue to do so every year as carriers do not want these packages in their network. Businesses should optimize packaging and reduce wasted space in order to avoid these added fees.

Address Correction Fee

Incorrect or incomplete shipping addresses will lead to even steeper correction fees in 2025. Businesses should implement automated address verification solutions to minimize unnecessary costs.

• FedEx address correction fee is  $24.00 per correction in 2025
• UPS address correction fee is $23.50 per correction in 2025. 
  

Credit card surcharge

UPS and FedEx will add a surcharge of 2% of the total amount paid on an invoice to invoices paid by credit card. This 2% fee will appear on your next invoice that follows the one you paid by credit card. The surcharge is not applicable to ACH or debit card payments, and does not apply to accounts based in the following jurisdictions: s reflected in UPS account information: Connecticut, Maine, Massachusetts, Minnesota, New York, Puerto Rico, and Oklahoma.

• Connecticut
• Maine
• Massachusetts
• Minnesota
• New York
• Puerto Rico
• Oklahoma
  

What Businesses Can Do to Adapt to 2025 Shipping Surcharges

Here are a few strategies to help businesses navigate these surcharges:

• Stay Informed: Follow updates from trusted sources and engage with shipping partners to stay ahead of the curve.
• Reassess Your Shipping Strategy: Consider alternative carriers or hybrid solutions that leverage the strengths of each carrier. 
• Get Expert Help: Work with logistics advisors who understand complex surcharge structures and can negotiate better carrier rates.
• Leverage Data Analytics: Use advanced shipping data analysis to identify cost-saving opportunities and eliminate unnecessary expenses.
• Optimize Fulfillment Strategies: Strategically distribute inventory across multiple warehouses to minimize high-cost delivery fees.
• Utilize Parcel Audit Services: Conduct regular audits to catch billing errors, recover overcharges, and ensure accurate invoicing.

Your Carrier Just Raised Rates Again. Now What?

At LJM, we take a personalized, high-touch approach to surcharge analysis, contract negotiation, and shipping optimization. Our tailored strategies ensure that your business isn’t just managing costs but actively maximizing savings and efficiency.

Don't let carrier surcharges drain you profits. Contact us today to start reducing costs.

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