Fuel surcharge: how carrier fuel charges work on 3PL invoices
How UPS and FedEx set fuel surcharges each week, what they apply to, how they show on 3PL invoices and how to check the markup a warehouse adds on top.
A fuel surcharge is a percentage that carriers add to shipping charges to track the price of fuel. UPS and FedEx both base theirs on weekly fuel prices published by the US Energy Information Administration (EIA) and change the percentage every week. On a 3PL invoice the fuel surcharge is usually passed through inside postage, often with the warehouse's markup on top, so the checks are whether the right percentage was applied to the right base and whether the markup matches your contract.
The percentage is large. FedEx's published Ground and Home Delivery fuel surcharge for the week of October 26, 2026 was 29.00%. A small error in how it is applied repeats on every package.
How carrier fuel surcharges work
Each carrier publishes a table that maps a fuel price range to a surcharge percentage, then applies the percentage that matches the latest EIA price.
| UPS | FedEx | |
|---|---|---|
| Ground index | EIA National U.S. Average On-Highway Diesel Fuel Price | EIA weekly U.S. on-highway average diesel price |
| Air or Express index | EIA U.S. Gulf Coast kerosene-type jet fuel price | EIA weekly U.S. Gulf Coast kerosene-type jet fuel spot price |
| How often it changes | Weekly, effective each Monday | Weekly |
| Lag | Uses an EIA price from an earlier week | Says there is a lag between the index and the surcharge |
| What it applies to | Transportation charges and certain accessorial, value-added and other charges | Ground: the net package rate plus listed surcharges such as residential delivery, additional handling and oversize |
The tables themselves change too. UPS announced that its US Ground, UPS Ground Saver and US Domestic Air fuel surcharge tables change effective November 2, 2026. So the percentage for a given fuel price is not fixed from year to year.
Two points matter for auditing. First, the surcharge is a percentage of the net charge, after discounts, plus some surcharges. Second, the week matters: UPS says the percentage in effect on the date of shipment applies, so the right figure is the one for the week the package shipped, not the week the invoice was written.
How fuel surcharges appear on 3PL invoices
| Format | What you see | What to check |
|---|---|---|
| Itemized carrier charges | Base postage, residential, fuel and other surcharges on separate columns per tracking number | The fuel amount equals the percentage times the right base |
| One shipping total per order | A single postage figure that includes fuel | Ask for the carrier breakdown so you can check fuel and markup |
| Marked-up pass-through | Carrier charges, including fuel, plus a percentage | Whether the markup is allowed on fuel and other surcharges |
| Flat 3PL shipping rates | A rate table from the warehouse, with fuel included or added on top | Whether the rate card says fuel is included |
How it is calculated
Worked example
Juniper & Pine (a made-up brand) ships a package through Ridgeline Fulfillment (a made-up warehouse) by FedEx Home Delivery during the week of October 26, 2026. The net base rate is $9.40 (a made-up figure). The FedEx Home Delivery residential surcharge in the 2026 Service Guide is $6.45, and the published Ground and Home Delivery fuel surcharge that week was 29.00%.
- Base plus residential: $9.40 + $6.45 = $15.85
- Fuel surcharge: $15.85 x 29.00% = $4.5965, which rounds to $4.60
- Carrier total: $9.40 + $6.45 + $4.60 = $20.45
Now apply the warehouse's markup. What you should pay depends on the contract wording:
- Contract A, "carrier charges at cost plus 8%": $20.45 x 1.08 = $22.086, so $22.09
- Contract B, "base postage at cost plus 8%, surcharges at cost": ($9.40 x 1.08) + $6.45 + $4.60 = $10.15 + $6.45 + $4.60 = $21.20
If your contract reads like B and the invoice shows $22.09, the difference is $22.09 - $21.20 = $0.89 a package. Across 1,000 packages a month, that is $890.00. Our shipping markup calculator checks the markup on a set of shipments.
Billing errors that show up
- Markup on surcharges the contract says pass through at cost, as in Contract B above.
- Fuel applied to the wrong base. Fuel should be calculated on the net rate the carrier billed. If the warehouse calculates it on a list rate, the amount is too high. With a made-up list base of $14.20 instead of the $9.40 net base, fuel becomes ($14.20 + $6.45) x 29.00% = $5.99 instead of $4.60.
- Fuel calculated after the markup and then marked up again, which compounds the markup.
- The wrong week's percentage, for example a higher rate from a later week applied to packages that shipped earlier.
- Fuel added to a flat rate that already includes it. If the rate card says the shipping table includes fuel, a separate fuel line should not appear.
- A fuel or energy surcharge on warehouse services, such as receiving or storage, that is not in your contract.
- Fuel on a wrong surcharge. If a residential surcharge was charged on a business address, the fuel calculated on it is wrong too.
How to check it
- Read how your contract bills carrier charges: at cost, at cost plus a markup, or from the 3PL's own rate table. Note whether the markup applies to surcharges.
- Ask the 3PL for shipment-level data with base postage, each surcharge and fuel on separate columns, plus the ship date and service.
- For a sample of packages, look up the carrier's published percentage for the ship week. UPS and FedEx both publish their weekly percentages on their fuel surcharge pages.
- Recalculate fuel as the percentage times the base and surcharges it applies to.
- Apply your contract's markup and compare with the invoice.
- If differences repeat, compare a few tracking numbers against the carrier's own invoice, which the 3PL can request. Our guide on shipping markup explains how to raise it.
Contract questions
- Are carrier charges billed at cost, at cost plus a markup, or from your own rate table?
- Does the markup apply to fuel and other surcharges, or only to base postage?
- Is fuel calculated on the net rate the carrier bills you?
- If you use a flat rate table, does it include fuel?
- Do you add any fuel or energy surcharge to warehouse services?
- Can we see the carrier's invoice detail for a sample of shipments if a charge is in question?
Get fuel surcharges checked
3PL Checker recalculates the fuel surcharge and markup on your 3PL's shipping lines using your contract terms and the carriers' published weekly percentages. The first audit is free, a person reviews every finding, and we never contact your warehouse.
Questions
What is a fuel surcharge?
A fuel surcharge is a percentage carriers add to their shipping charges to cover changes in fuel prices. UPS and FedEx tie it to weekly fuel price data from the US Energy Information Administration and change it every week.
How much is the fuel surcharge?
It changes weekly. FedEx published 29.00% for FedEx Ground and FedEx Home Delivery for the week of October 26 to November 1, 2026, applied to the net package rate plus certain surcharges, so check the carrier's page for the week your packages shipped.
How often does the UPS fuel surcharge change?
Every week. UPS says its index-based surcharge is adjusted weekly, with changes taking effect on Monday, based on the EIA diesel price for Ground and the EIA Gulf Coast jet fuel price for Air.
Can a 3PL mark up the fuel surcharge?
Only if your contract allows it. If carrier charges are billed at cost plus a markup, check whether that markup covers surcharges such as fuel or only the base postage.