How much do carriers make on fuel surcharges?
Carriers do not report fuel surcharge profit, and UPS and FedEx both describe fuel as having little net effect on profit. Ground fuel surcharges are near 30% of transportation charges this fall. Third-party analyses of carrier filings put fuel at about 4–7% of UPS’s and FedEx’s total operating costs. Those two percentages measure different things and cannot be subtracted to give a margin.
- Company disclosure: figures a company reported itself.
- Third-party analysis: an outside firm’s reading of filings or invoices.
- Modeled scenario: our illustrative calculation, with every input shown.
- Editorial: our interpretation, labeled as such.
Modeled scenario: one trailer, two numbers
The fuel surcharge billed on a trailerload of packages next to the diesel for that trailer’s single linehaul trip. The diesel figure covers one tractor only, not pickup, delivery, aircraft, hubs or empty miles, and the ratio is not a profit margin.
29% is an illustrative default, not a quoted UPS rate. . Next week (Nov 2–8) is 30.25%, calculated.
| Base package transportation revenue | $30,400 |
|---|---|
| Fuel surcharge revenue | $8,816 |
| Total modeled package revenue | $39,216 |
| Diesel consumed | 76.92 gallons |
| Tractor diesel expense | $488.62 |
| Fuel surcharge per package | $2.32 |
| Linehaul diesel per package | $0.13 |
| Surcharge revenue ÷ linehaul tractor diesel only | 18.0× |
Illustrative linehaul model, not a carrier’s actual cost. It counts only the tractor’s diesel between hubs. The surcharge also has to cover pickup and delivery vans, aircraft jet fuel, return and empty miles, and hub operations, which add substantially to fuel cost per package. The ratio is not a profit margin and says nothing about the carrier’s total fuel cost. It shows only that a surcharge set as a percentage of the package price is not a pass-through of the fuel used on any single movement.
Fuel surcharge facts
Each figure is labeled by type and links to its source.
What the carriers say (company statements, as reported)
- UPS, Q2 2026Fuel costs rose 60.4% in the quarter; UPS’s CFO described the net impact on profit as minimal. Source
- UPS CEO Carol ToméDescribed fuel as a benefit to the top line more than the bottom line. Source
- FedEx, fiscal 2026Said fuel surcharges were not a material driver of adjusted operating income. Source
- FedEx Freight CEO John SmithTold investors the fuel surcharge is “never truly a pure pass-through.” Source
Table changes
Carriers have revised their tables several times, so the same fuel price now produces a higher percentage. AFS Logistics (third-party analysis) attributes most of the recent rise in surcharge costs to such calculation changes rather than diesel.
At $3.50 diesel, the January 2026 level, by table effective date
At $3.50 diesel, the January 2026 level, by table effective date
At $2.50 jet fuel, the pre-spike level, by table effective date
The percentage is published. What you pay is negotiable.
Fuel discounts, caps, accessorial exclusions and table protection are common contract terms. Logistics Contract Optimizer, the publisher of this site, reviews parcel agreements at no cost.
Questions
Do UPS and FedEx profit from fuel surcharges?
Neither carrier reports fuel surcharge profit, and both describe fuel as having little net effect on profit. A third-party analysis of UPS filings found fuel surcharge revenue grew faster than fuel expense in 2022. Surcharge revenue is not profit: it is billed on package charges and helps cover fuel across the whole network.
Why is the fuel surcharge higher than the cost of fuel?
The surcharge is a percentage of the package price, not a fuel cost per package. As base rates rise, the surcharge rises with them. Carriers also rewrite their tables so the same fuel price produces a higher percentage, which this site tracks in the Table Creep Index.
Is the fuel surcharge negotiable?
Yes. Shippers commonly negotiate a discount off the published percentage, a cap, exclusions for accessorial charges, and protection against mid-contract table changes.