Year after year, e‑commerce continues to take a bigger share of the global retail landscape. While the majority of retail business is still conducted at brick-and-mortar businesses, e-commerce continues to chip away.
As internet access expands and smartphones become ubiquitous, more of us are preferring to shop from our phones and in our family rooms at all hours of the day and night.
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Online retail sales surged nearly 14% in 2024 alone, while projected global e‑commerce revenue could hit $6.5 trillion by 2027, according to the U.S. Census Bureau.
The growth is driven by big players like Amazon, Walmart, and Target, by an explosion of direct‑to‑consumer (DTC) brands like Warby Parker and GoodRx, and by niche marketplaces like Etsy.
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Social media platforms have become virtual storefronts, offering seamless shopping experiences, from “buy now” buttons in apps to one‑click checkouts. It all adds up to increased consumer expectations around convenience.
E‑commerce is changing how we shop and at the same time triggering a revolution in fulfillment and logistics. Same‑day and next‑day delivery are now baseline demands in many urban markets. While e-commerce continues to grow, shipping and logistics grow right alongside it.
Retailers are investing heavily in warehouse automation, real‑time inventory visibility, and smart packaging to keep up with consumer demands. But as e‑commerce thrives, so do its challenges, especially when it comes to packaging and shipping.
UPS is adding surcharges that will affect small businesses and consumers.
Image source: Morris/Bloomberg via Getty Images
UPS’s 2025 surcharge announcement
In early June 2025, UPS announced sweeping changes to its surcharge structure, an adjustment that ripples through e‑commerce logistics.
UPS increased fuel surcharges across both domestic and international services, affecting ground, air, and Ground Saver shipments. The updates went into effect May 12 and May 26.
UPS also tweaked the zones subject to its delivery area surcharges starting June 1.
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Perhaps most notable, beginning August 17, the carrier will overhaul its handling of bulky packages. Costs were historically based on “length plus girth.” New thresholds target parcels over 110 lbs. or 17,280 cubic inches, and packages over 8,640 cubic inches now also trigger additional handling fees.
UPS justified the changes as essential for supporting network expansion and maintaining service levels. However, recalibration means added complexity and potential cost increases for shippers like e‑commerce businesses with fluctuating package profiles.
Any parcel heavy in girth or weight now demands sharper scrutiny from inventory managers. They will have to reassess packaging sizes, while fulfillment teams will need to flag parcels that once skirted fees but now exceed the new thresholds.
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UPS seems to be steering shippers toward leaner packages, offloading cost pressure and causing network strain to go back onto sellers.
For consumers sending personal packages and small businesses that don’t have the same contract negotiating power as big retailers the change means higher out-of-pocket costs.
How much will new UPS surcharges increase shipping costs?
Let’s say your base shipping rate is $20, and a surcharge of 18.75% now applies due to the recent increase. That means the fuel surcharge — $20 × 18.75% — is now $3.75.
If there is also a $5 residential delivery charge, the fuel surcharge creeps up to $4.69.
For consumers and small businesses, the surcharges compound on nearly every fee and delivery type, making it harder to predict what shipping will actually cost.
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For online shoppers, that might mean higher prices at checkout. For businesses, especially those already squeezed by inflation and competitive shipping markets, it’s yet another variable eating into margins.
The move reflects a growing trend among logistics giants: shifting rising operational costs onto customers, often in ways that aren’t immediately obvious.
And while fuel prices may fluctuate, surcharge tiers rarely move down once they’ve been raised.
In short, whether you’re mailing a birthday gift or running an e-commerce brand, you’re now paying more to move packages — even if gas prices aren’t surging.
