UPS is tacking on fees for shippers ordering packages coming out of China, Hong Kong and Macau.
Going into effect Sunday, UPS has placed these “surge fees” on a per-kilogram basis, depending on region. These surcharges will be applied to export shipments to destinations across the U.S., the rest of North and South America, Europe, Africa, the Indian subcontinent and the Middle East.
U.S. businesses will have to pay an extra 66 cents per kilogram (29 cents per pound) for packages out of mainland China, Hong Kong and Macau, based on the shipment’s billable weight. The fee is also subject to a fuel surcharge, UPS says.
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The fees will be in effect until March 29.
“Our goal is to ensure that we can continue to meet our customers’ shipping needs without compromising on the quality or timeliness of service expected from us,” said UPS in a customer update on Monday.
UPS revises its surge fees for selected shipments in response to market conditions, but a spokesperson for the company said the move is not in response to the 20 percent tariffs the U.S. has imposed on all Chinese imports.
“UPS’s Surge Fee was introduced six months ago,” the spokesperson told Sourcing Journal. “This fee helps protect the network during periods of greater demand and ensures UPS is compensated appropriately for additional costs incurred to maintain our high-quality service.”
Surge fees may be implemented based on regular assessments of shipping volume, available capacity and other considerations, UPS says.
Based on its own discretion, the company can impose one or more surge fees on packages shipped during a peak or high demand period.
This is likely going to spur along more pricing adjustments, particularly as the future of the duty-free de minimis provision for low-value Chinese packages entering the U.S. remains uncertain.
FedEx has not released comparable fees for Chinese imports thus far this year.
For UPS, this isn’t the first time in recent months that a surge fee has been applied to shipments out of China, Hong Kong and Macao.
The carrier levied a heavier 50 cents per pound fee for U.S.-bound imports as of Sept. 15. At the time, UPS was dealing with escalating volumes from Shein and Temu, both of which had been flooding air cargo out of China throughout 2024.
The rise in the shipments from both companies helped deliver a massive uptick in air cargo demand into the U.S. throughout last year. But for companies like UPS, the new volume also had a side effect. Many of the packages were unprofitable, since so many of them were direct-to-consumer, low value shipments—hence the additional surge fees.
On the same day UPS implemented the most recent surge fees, it also increased its fuel surcharges for its U.S. ground, SurePost and domestic air businesses by 0.5 percentage points.
UPS adjusts its index-based fuel surcharges weekly based on the U.S. Energy Information Administration’s average on-highway diesel fuel price and the U.S. Gulf Coast jet fuel price average. If the national diesel fuel index’s price per gallon is $3.83, a UPS ground or SurePost shipment will see a 19 percent surcharge instead of an 18.5 percent added fee.
The fuel surcharges further push up overall shipping costs. According to the Q1 TD Cowen/AFS Freight Index released in January, the extra fuel fees for both UPS and FedEx raised the average net fuel cost for ground parcel shipments by 4.7 percent sequentially into last year’s fourth quarter.
Those fuel costs resulted in a 3 percent increase in total costs per ground package on a sequential basis, and kept the costs relatively stable on a year-over-year basis.
The extra surcharges have come on top of the general rate increases (GRIs) that have been installed by UPS and FedEx for 2025. Both couriers have added 5.9 percent GRIs as part of their annual hikes.
At the same time, the subdued demand throughout the parcel industry and a flurry of competitors in the last-mile delivery space have both caused the major players to implement more discounts to bring on more clients.
While the first quarter is projected to see a seasonal bump on the strength of the GRIs, the 4.1 percent rate-per-package projection of the TD Cowen/AFS Express Parcel Freight Index represents a 0.4 percent year-over-year decline. The report calls it “the product of a full year of aggressive discounting.”
