Full Breakdown
UPS and FedEx Implement New Fuel Surcharges Amid Iran Conflict
3/15/2026, 12:57:11 AM
Overview of New Surcharges
In response to the ongoing conflict in Iran, both UPS and FedEx have introduced temporary surcharges for shipments between the United States and various countries in the Middle East. Effective immediately, UPS has implemented a $0.64 per-pound surcharge for shipments traveling to and from 15 Middle Eastern countries. FedEx has also introduced a $0.50 per-pound demand surcharge for shipments to numerous countries in the Middle East, South Asia, and Africa, alongside a $0.70 per-pound fee for shipments returning to the U.S. Additionally, FedEx has raised its surcharge for shipments to Israel from $0.50 to $1.50 per pound.
Impact of Geopolitical Tensions
The surcharges are attributed to increased oil prices and geopolitical risks stemming from the Iran conflict, which have strained logistics networks. David Sullivan, director of professional services at ShipScience, noted that shippers should anticipate further price volatility and targeted fees linked to the ongoing conflict. Both UPS and FedEx have acknowledged the impact of the situation on their operations, with UPS activating contingency plans to mitigate customer disruptions and FedEx resuming services where safe, albeit with extended transit times.
Challenges in Logistics
The conflict has resulted in extensive airspace closures in the Middle East, complicating connectivity between the Indian subcontinent and North America and Europe. Flexport has reported that these closures have forced carriers to take longer routes and increase fuel loads, further straining air freight capacity. As a result, shippers may experience longer transit times and fluctuating fuel surcharge pricing.
Fuel Surcharge Trends
Both UPS and FedEx adjust their fuel surcharge rates weekly based on average diesel and jet fuel prices. For instance, as of March 2026, UPS's fuel surcharge for domestic ground shipments increased to 22.75%, while FedEx's rate stands at 22.25% under similar conditions. The rising fuel surcharge rates have been a concern for shippers, with a 4.7% year-over-year increase in diesel prices correlating with a 26% rise in carrier fuel surcharges, according to the TD Cowen/AFS Freight Index.
Criticism of Surcharge Practices
Critics argue that the frequent adjustments to fuel surcharges exacerbate shipping costs for businesses. Nate Skiver, a parcel analyst, suggested that customers can mitigate these impacts by negotiating customized surcharge terms or exploring alternative carriers. Despite the challenges posed by rising surcharges, UPS reported a $282 million increase in fuel surcharge revenue in 2025, indicating that higher surcharges can positively affect carrier profitability.
Conclusion
The introduction of new fuel surcharges by UPS and FedEx highlights the significant impact of geopolitical events on global logistics. As the situation in Iran continues to evolve, shippers are advised to remain vigilant regarding potential changes in pricing and service availability.
