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Courier Express: Fuel Surcharges, Middle East Disruptions & Shipping Strategies
Rising fuel surcharges, Middle East service disruptions, and what merchants should do now
What's Happening
The U.S.–Israel military campaign against Iran, launched on February 28, 2026, has closed the Strait of Hormuz, shut down airspace across multiple Middle East nations, and triggered a sharp oil price spike. As a result, fuel surcharges on all major courier express services have increased rapidly, and express services to much of the Middle East are suspended or severely disrupted.
Fuel Surcharge Changes
International Express Fuel Surcharge — FedEx vs. UPS (90-Day History)
Both FedEx and UPS calculate international express fuel surcharges based on the U.S. Gulf Coast (USGC) kerosene-type jet fuel spot price, updated weekly.
| Effective Week | Jet Fuel ($/gal) | FedEx Express | UPS Express | WoW Change |
|---|---|---|---|---|
| 2026/03/16 | $3.103 | 38.50% | 38.50% | +5.25pp |
| 2026/03/09 | $2.469 | 33.25% | 33.25% | +1.25pp |
| 2026/03/02 | $2.317 | 32.00% | 32.00% | +1.25pp |
| 2026/02/23 | $2.154 | 30.25% | 30.75% | ~flat |
| 2026/02/16 | $2.120 | 30.25% | 30.50% | ~−0.50pp |
| 2026/02/09 | $2.184 | 30.75% | 31.00% | +0.50pp |
| 2026/02/02 | $2.095 | 30.25% | 30.25% | +2.00pp |
| 2026/01/26 | $2.015 | 28.25% | 29.50% | ~flat |
| 2026/01/19 | $1.873 | 28.25% | 28.25% | −0.25pp |
| 2026/01/12 | $1.908 | 28.50% | 28.50% | −0.50pp |
| 2026/01/05 | $1.950 | 29.00% | 29.00% | −0.25pp |
| 2025/12/29 | $1.990 | 29.25% | 29.25% | 0pp |
| 2025/12/22 | $1.990 | 29.25% | 29.25% | — |
Key Observations
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Pre-crisis (Dec 2025 – Feb 2026): Surcharges were stable at 28–31%, fluctuating within a narrow band.
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Post-crisis (Mar 2 – Mar 16): Surcharges surged from 32.00% to 38.50% — a +6.50 percentage point increase in just two weeks.
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Largest single-week jump: The week of March 16 saw a +5.25pp spike, driven by jet fuel jumping 25.7% in one week ($2.469 → $3.103/gal).
How Surcharges Are Calculated
FedEx and UPS adjust fuel surcharges weekly based on EIA-published fuel prices:
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FedEx: New surcharge takes effect the Monday following the EIA update (~1 week lag).
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UPS: New surcharge is based on the EIA price from two weeks prior (~2 week lag).
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Air/Express services: Surcharge moves +0.25% for every $0.05/gal increase in jet fuel.
What This Means for Merchants
Direct Cost Impact
On a $100 base-rate international express shipment:
| Period | Fuel Surcharge | Total Cost | Change from Dec |
|---|---|---|---|
| Late December 2025 | $29.25 | $129.25 | — |
| Late February 2026 | $30.25 | $130.25 | +$1.00 |
| Week of March 16 | $38.50 | $138.50 | +$9.25 |
Compounding Effects
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Fuel surcharges apply to total transportation charges, including other surcharges (residential delivery, oversize, remote area). This means surcharges compound on surcharges.
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The announced 5-6% general rate increase from January 2026, combined with rising fuel surcharges, means real per-shipment costs are now 8–12% higher than in January.
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Merchants with thin margins on free-shipping offers or flat-rate shipping programs should review pricing immediately.
What Merchants Should Expect Next
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Surcharges on invoices this week still reflect early March fuel prices. The current jet fuel price ($3.10+/gal) has not yet fully flowed through. Expect surcharges to climb toward 40–42% by late March if oil stays elevated.
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If the crisis worsens and oil doubles, express fuel surcharges could reach 45–55%.
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Even if the conflict resolves quickly, surcharges will take 1–2 weeks to decline.
Recommended Shipping Strategies
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Review and adjust shipping rates — audit your Shopify rates against current actual costs, since most were set when surcharges were 28–29% vs. today's 38.5%
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Compare carriers via shipping automation — FedEx lag (~1 week) vs. UPS lag (~2 weeks) means surcharge levels differ week to week. Automate this comparison rather than checking manually.
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Where delivery timelines permit, switch from express to economy services. Use lower-cost options such as SF Express Economy, Ninja Van, Spaceship Air economy services, and postal providers to reduce shipping costs in exchange for longer transit times. For high‑value shipments sent via postal or other economy services, add Spaceship Care, and be sure to account for the fact that postal carriers typically make only one delivery attempt.
- Build fuel adjustment into pricing. For B2B customers, introduce a fuel cost adjustment clause tied to the EIA weekly jet fuel index so increases flow through automatically.
Last Updated: March 13, 2026