UPS plans surge fee for all China-to-US imports

UPS is adding new fees on shipments originating from China, Hong Kong, and Macau, as part of its ongoing strategy to manage increased shipping volumes and rising costs.

Effective Sunday, UPS will apply “surge fees” on a per-kilogram basis, varying by region. These surcharges will impact export shipments to destinations across the U.S., the rest of North and South America, Europe, Africa, the Indian subcontinent, and the Middle East.

For shipments bound for the U.S., businesses will be charged an additional 66 cents per kilogram (29 cents per pound) based on billable weight. UPS also notes that the fee will be subject to a fuel surcharge. These charges will remain 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,” UPS stated in a customer update on Monday.

While UPS periodically adjusts its surge fees based on market conditions, a company spokesperson clarified that this latest increase is unrelated to the 20% tariffs the U.S. has imposed on all Chinese imports.

“UPS’s Surge Fee was introduced six months ago,” the spokesperson told news outlets. “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.”

UPS determines surge fees based on ongoing assessments of shipping volume, available capacity, and other operational factors. The company reserves the right to impose multiple surge fees on shipments during peak demand periods.

The latest increase could trigger further pricing adjustments, particularly as uncertainty looms over the future of the duty-free de minimis provision for low-value Chinese packages entering the U.S. So far, FedEx has not announced comparable fees for Chinese imports this year.

This isn’t the first time UPS has imposed surge fees on shipments from China, Hong Kong, and Macau. On Sept. 15, the carrier implemented a steeper charge of 50 cents per pound on U.S.-bound imports, responding to soaring shipment volumes from e-commerce giants Shein and Temu. Throughout 2024, these companies flooded air cargo routes out of China, creating a surge in demand for U.S. air freight capacity. However, while the increased volume benefited air cargo providers, many of the shipments were low-margin, direct-to-consumer packages—prompting UPS to introduce additional fees to offset costs.

In addition to the new surge fees, UPS raised its fuel surcharges by 0.5 percentage points on the same day. This increase applies to U.S. ground, SurePost, and domestic air services.

UPS adjusts its index-based fuel surcharges weekly, using data from the U.S. Energy Information Administration’s average on-highway diesel fuel price and the U.S. Gulf Coast jet fuel price. For instance, if the national diesel fuel index reaches $3.83 per gallon, a UPS ground or SurePost shipment will incur a 19% fuel surcharge, up from the previous 18.5%.

The rising fuel costs have added to overall shipping expenses. According to the Q1 TD Cowen/AFS Freight Index released in January, fuel surcharges for UPS and FedEx increased the average net fuel cost for ground parcel shipments by 4.7% sequentially in Q4 2024. This resulted in a 3% rise in total ground package costs on a sequential basis while keeping year-over-year costs relatively stable.

These additional charges come on top of the general rate increases (GRIs) implemented by UPS and FedEx for 2025. Both companies introduced a 5.9% GRI as part of their annual pricing adjustments.

However, despite these price hikes, the parcel industry is facing subdued demand and growing competition in last-mile delivery. To attract and retain customers, major carriers have ramped up discounting efforts. 

While the first quarter is expected to see a seasonal boost from GRIs, the TD Cowen/AFS Express Parcel Freight Index projects a 4.1% rate-per-package increase. However, this reflects a 0.4% year-over-year decline, with the report attributing it to “a full year of aggressive discounting.”

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