If you’re seeing a higher-than-normal fuel surcharge on your shipping invoice lately, you’re not alone. Businesses across the country have been watching that line item climb every week for the last month.
And while fuel surcharging is nothing new, the costs you’re seeing now can definitely be an eye-opener and cause you to think a bit more about your overall shipping costs.
But before you pick up the phone and call your carrier to complain, it’s worth understanding exactly what’s happening and what you can do about it.
Understanding Fuel Surcharges on Shipping Invoices
Fuel surcharges are variable fees that carriers add to every shipment to offset the cost of diesel. It’s adjusted regularly based on published price indexes, typically tied to the US Department of Energy’s weekly national average.
When the cost of oil goes up, so does the surcharge. When prices drop, the prices come down (at least they’re supposed to).
Carriers frame this as a pass-through cost, and it technically is. But it is also a way to shield carriers from fuel price volatility, shifting exposure to businesses relying on their services.
Surcharge rates update on a set schedule (typically weekly or monthly), and the price gets compounded on top of your base rate. Depending on your carrier agreement, it can add anywhere from 15% to 25% or more to your shipping costs on any given week.
Why Fuel Surcharges Are Higher Right Now
Fuel surcharges are higher right now due to the rising costs of crude oil, which has been spiking sharply since the start of the US-Iran conflict and closure of the Strait of Hormuz in the Middle East.
Diesel prices have climbed to $5.62 per gallon, a 49% increase since the war started. Regular gasoline prices are up 38% over that same period.
As a result, all of the major carriers have increased their fuel surcharges to percentages that we haven’t seen in years. And for the first time ever, USPS is implementing an 8% fuel surcharge that goes into effect on April 26, 2026.
Can You Negotiate Fuel Surcharges With Your Shipping Carrier?
Unfortunately, fuel surcharges are typically non-negotiable. Your carrier rep doesn’t set the number, and if you call to complain, they likely won’t be able to lower the rate or waive those fees.
However, you have a few other ways you can indirectly lower your fuel surcharge fees:
- Base Rate Negotiation — Surcharges are calculated on a percentage of your base shipping rate. So if you negotiate a better base rate (which is doable), the dollar amount of the surcharge drops even if the percentage stays the same.
- Surcharge Caps — Some high-volume shippers can negotiate a cap on surcharges in their carrier contracts. This isn’t available to most small and mid-sized businesses, but definitely worth asking about if you’re shipping at scale.
- Regional Carrier Mix — Regional shipping carriers like OnTrac, GLS, and CDL Last Mile can sometimes have cheaper surcharge rates than the big national players. Depending on your location and where your customers are located, routing some of your parcels through a local provider can be more cost-effective.
But for most businesses, you’ll likely need to absorb these costs until the price of fuel comes down.
How to Save Money on Shipping Despite High Fuel Costs
While you can’t control the surcharge rates set by carriers, you can control everything else. There are plenty of other areas of your shipping invoices that you can address to save money, and you likely don’t need to switch carriers to benefit.
Here’s what you can do:
- Look for other shipping surcharges on your bill that are negotiable (additional handling, DAS fees, address corrections, etc.).
- Use your volume as leverage to negotiate lower rates with your carrier.
- Get a quote from another carrier to undercut your current prices, and ask your current provider to match or beat it.
- Claim refunds on SLA failures (late deliveries, lost packages, damaged parcels, etc.)
- Audit your statements to look for billing errors, double-charges, and other line items that just don’t look right.
- Push back harder against annual rate increases.
You’d be surprised how much savings are hiding in plain sight on your shipping invoices.
Most businesses don’t take the time to truly audit these. They just glance at them quickly, look at the totals and large costs like fuel surcharges, and move on. But when we audit these statements for our clients, we find errors, overcharges, and savings opportunities 90% of the time.
So unless you recently conducted a parcel audit or shipping carrier invoice review, there’s a good chance you’re overpaying somewhere.
Other Ways Businesses Are Finding Relief
Beyond your direct shipping costs, there are other expense categories that you should be taking a closer look at right now. Addressing these can easily offset fuel surcharges, and likely put you ahead of where you were before those surcharges spiked.
Examples include:
- Merchant fees and credit card processing
- SaaS subscription and software costs
- Waste removal and recycling fees
- Internet and telecom services
- Payroll processing
- Insurance
- Utilities
I’ve worked with businesses that saved over $10k per month by addressing just one of these categories. So if you’re able to find savings in multiple areas, you can easily keep more money in your pocket despite higher fuel costs on your shipping invoice.
Final Thoughts
The average business is virtually helpless when it comes to global supply chain issues tied to wars and crude oil. And while your base fuel surcharges are usually non-negotiable, you don’t have to just take these added costs on the chin.
Take a closer look at your shipping invoice to find other opportunities to save money. And if that doesn’t work, consider some other expense categories where you might be overpaying.
High fuel surcharges are temporary. But these cost-saving tips can be permanent if you play your cards right.