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Surcharges Stack Up in the Most Expensive Parcel Shipping Year on Record

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Surcharges Stack Up in the Most Expensive Parcel Shipping Year on Record

It has never cost more to ship a parcel than it will this peak season.

A quarterly analysis from transportation cost management and auditing company AFS Logistics and TD Cowen projects a 5.8 percent year-over-year increase in the ground parcel rate-per-package index, which measures the all-in cost to ship a ground parcel, benchmarked to January 2018.

The index is 43.3 percent above the baseline from eight years ago, while the express parcel index is up 20.3 percent, marking a fifth straight quarterly record.

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The index draws on AFS Logistics data covering more than $11 billion in annual spend and measures predictive pricing for parcel, truckload and less-than-truckload (LTL) transportation markets across 1,800 companies.

For holiday shippers, the immediate pressure comes from demand surcharges that are set to escalate in late November. Ahead of the season, UPS raised its ground residential surcharge 25 percent to 75 cents per package and lifted handling and large-package fees for the Nov. 22-Dec. 26 window, mirroring FedEx’s schedule, which raised its ground residential fee 23.1 percent to 80 cents.

“For shippers, peak season involves a year-long tight-rope act of balancing volume across carriers to maintain access to capacity when orders really need to move and to limit the impact of demand surcharges that incrementally penalize volume that exceeds baselines established earlier in the year,” said Mingshu Bates, chief analytics officer and president of parcel at AFS Logistics.


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