What Do Fuel Surcharges Mean For Retail?

Amazon will begin charging third-party sellers a 3.5% “fuel and logistics surcharge,” joining UPS, FedEx, and USPS applying such fees as the Iran war has caused a surge in diesel and jet fuel prices.

“Elevated costs in fulfillment and logistics have increased the cost of operating across the industry," Amazon said in a note to sellers. "We have absorbed these increased costs so far. However, similar to other major carriers, when costs remain elevated, we implement temporary surcharges on our fulfillment fees to recover a portion of the actual cost increases we are experiencing."

The surcharge will equate to 17 cents per unit for U.S. FBA, although it will vary based on each item's size and dimensions. Amazon added, “Due to the work we have already done together to lower costs, this surcharge is meaningfully lower than other major carriers.”

Amazon implied the charge is temporary, noting it will “continue to evaluate this surcharge as conditions evolve.”

Amazon, UPS, FedEx Among Those Issuing Fuel Surcharges

Among carriers, UPS and FedEx are currently applying fuel surcharges ranging from roughly 21% to more than 30% depending on service type, with multiple increases already implemented in 2026. Starting April 26, USPS will impose a temporary 8% price increase on select packages, including Priority Mail, marking the first fuel surcharge in history.

Noah Wickham, My Amazon Guy's VP of sales and marketing, argued on LinkedIn that Amazon’s surcharge is likely to remain in place even if fuel prices stabilize, as carriers often keep such fees to avoid sudden price fluctuations.

Satish Jindel, president of ShipMatrix, which tracks parcel shipping data, told the Wall Street Journal that the fuel surcharges are expected to exert the biggest impact on smaller companies, as larger ones have leverage to negotiate surcharges with carriers.

Retail Shoppers Absorbing the Bulk of Increased Costs

Consumers are expected to absorb the surcharges from Amazon and others, with average gas prices rising by over $1 since the war started on February 28.

“If you’re taking an extra 5% to 10% from tariffs, an extra 3.5% from this fuel surcharge... there are definitely gonna be some retailers where this might be the final straw and it actually pushes them into the red,” Alex King, founder of personal finance site Generation Money and a former international trade VP at Barclays, told The New York Post.

Retail Industry Leaders Association (RILA) in a blog entry called out USPS’ first surcharge ever as “more than a routine pricing adjustment; it is a meaningful policy signal.”

RILA wrote, “For retailers, the proposal underscores the importance of early and sustained engagement with policymakers on shipping costs and broader postal reform. For policymakers, it serves as a reminder that postal pricing decisions carry broad economic implications across the retail and logistics ecosystem.”