UPS shipping surcharges and fees can make or break your parcel spend budget.

As the year continues, UPS has implemented several notable increases to fuel surcharges, payment processing fees, and late payment penalties. The 2025 adjustments represent some of the most substantial changes in recent years, reflecting broader economic pressures and the carrier’s ongoing investment in infrastructure.

For businesses that rely heavily on shipping, these surcharges can add up to a significant portion of overall logistics costs—it could mean a few extra dollars or thousands. Proactively managing these surcharges is essential for an effective parcel spend management strategy.

In this blog, we’ll go over the latest UPS shipping surcharges and key parcel spend management strategies to keep your shipping costs down.

UPS Shipping Surcharges for 2025: New Fees and Updates

Fuel Surcharges

  • Effective Date: May 26, 2025
  • Details: U.S. Ground Domestic and the UPS Ground Saver® Fuel Surcharge and the U.S. Domestic Air Fuel Surcharge will increase based on the National U.S. Average On-Highway Diesel Fuel Price. The Domestic Ground Surcharge will now be 19%.
  • Why It Matters: Fuel surcharges are among the most volatile components of shipping costs. Because they apply to every package shipped, fuel surcharges directly impact your bottom line.

Print Invoice Fee

  • Effective Date: March 31, 2025
  • Details: UPS will charge a $5 fee for each printed invoice copy sent to shippers or other payers.
  • Why It Matters: This fee, introduced to encourage electronic invoice management, can quickly accumulate for businesses that haven’t transitioned to digital billing systems, particularly those managing multiple accounts or requiring printed documentation for record-keeping.

Payment Fees

  • Effective Date: May 19, 2025
  • Details: The Credit Card Surcharge will no longer apply, but shippers can now expect a payment processing fee, equal to 2% of certain invoice charges, to be added to each invoice. The late payment fee has also increased from 8% to 9.9%
  • Why It Matters: This fee, introduced to encourage electronic invoice management, can quickly accumulate for businesses that haven’t transitioned to digital billing systems, particularly those managing multiple accounts or requiring printed documentation for record-keeping.

Surge Fee

  • Effective Date: May 18, 2025
  • Details: UPS is implementing a Surge Fee for all shipments from the U.S. to Canada for the following services:
    • UPS® Worldwide Economy: $1.25 per lb.
    • UPS® Standard to Canada: $0.49 per package
    • UPS Worldwide Express®, UPS Worldwide Saver®, UPS Worldwide Express Plus®, UPS Worldwide Expedited®, UPS Worldwide Express Freight®: $0.49 per lb.   
  • Why It Matters: U.S. businesses that ship internationally to Canada will see immediate increases in shipping costs until further notice.

International Collect On Delivery (ICOD) Fee For U.S. Deliveries

  • Effective Date: June 2, 2025
  • Details: UPS is imposing an International Collect on Delivery (ICOD) fee of $12 for U.S. deliveries. This new fee will be charged to the U.S. consignee at delivery along with any unpaid duties, taxes, and other fees for the shipment. Consignees can potentially avoid the ICOD fee if they pay the applicable customs charges electronically, prior to delivery, through the UPS  International Pre-Payment Application (IPPA).
  • Why It Matters: If the fee isn’t paid, the shipment will not be released, and in some cases, the shipment may be returned to the sender or abandoned.

Domestic Shipping Zone Adjustments

  • Effective Date: August 17, 2025
  • Details: UPS is imposing additional handling surcharges to commercial and residential packages in the following zones:
    • Commercial packages
      • Zone 2: $205.00
      • Zone 3-4: $225.00
      • Zone 5-6: $250.00
      • Zone 7+: $260.00
    • Residential packages
      • Zone 2: $240.00
      • Zone 3-4: $260.00
      • Zone 5-6: $297.50
      • Zone 7+: $305.00
  • Why It Matters: Zone adjustment fees and surcharges can impact your shipping budget for 2025. Shippers need to be cautious of these changes and continue to find ways to save on shipping costs amid off-cycle changes.

Dynamic Pricing Changes

Shipping Budget Tip: For a complete list of new billing rules, like cubic volume assessments and credit card fees, add unexpected costs that could significantly affect your shipping budget, download Reveel’s 2025 General Rate Increase (GRI) report.

4 Strategies for Managing UPS Surcharges in 2025

1. Contract Negotiation Techniques

For businesses with significant shipping volume, negotiating favorable contract terms with UPS remains one of the most effective strategies for managing surcharges and fees. At the negotiation table, shippers should focus on key considerations like:

  • Leveraging consistent shipping volume as negotiating leverage
  • Focusing negotiations on the specific surcharges most relevant to your shipping profile
  • Building relationships with UPS account representatives who can advocate for your business

Surcharges most amenable to negotiation include residential delivery fees, additional handling charges, and delivery area surcharges, particularly for businesses with consistent volume to affected areas.

Consultant-free contract optimization: Parcel shipping consultants can be costly. Reveel’s PSM 2.0 software empowers shippers to negotiate on their own with the tools and data they need to negotiate the most optimal UPS carrier agreement. Learn more here.

2. Packaging Optimization for UPS

Optimizing packaging specifically for UPS’s dimensional weight pricing can yield significant savings:

  • Design packaging that minimizes empty space while maintaining product protection
  • Consider custom box sizes for frequently shipped items to reduce dimensional weight
  • Evaluate the cost-benefit of using UPS-provided packaging for eligible service levels
  • Regularly audit packaging practices to ensure compliance with UPS guidelines

Even small reductions in package dimensions can translate to substantial savings when multiplied across thousands of shipments.

3. Distribution and Delivery Strategies

Strategic distribution planning can significantly reduce UPS surcharges:

  • Analyze customer locations to optimize warehouse placement, reducing delivery zones and associated costs
  • Utilize the UPS Access Point network for residential deliveries to avoid residential surcharges
  • Consider zone-skipping strategies for high-volume shipping lanes
  • Evaluate consolidation opportunities to reduce per-package surcharges

Establishing distribution centers in strategic locations can reduce transit times and associated surcharges for businesses with predictable shipment patterns.

4. Conduct a Parcel Audit

The only way to know if your business is being overcharged by carriers is through regular parcel audits. A parcel analysis will:

  • Verify the correct application of negotiated rates and discounts
  • Identify and recover credits for service failures
  • Analyze invoices for incorrect surcharges or duplicate charges
  • Develop a comprehensive understanding of your actual shipping costs beyond headline rates

Many businesses find that professional parcel audit services quickly pay for themselves through recovered credits and identified savings opportunities.

Action Plan for Shippers in 2025

In the immediate future, shippers can do three things to protect their shipping budget:

  1. Conduct a UPS account analysis: Review your UPS account structure and ensure you’re utilizing all available discounts and incentives. Reveel’s Parcel Audit Software can uncover missing credits, discrepancies, and overpayments in seconds.
  2. Review the carrier contract: Make sure your UPS contract aligns with your company’s shipping needs and budgetary constraints. Reveel’s Contract Management feature also fully integrates with your business, giving you a 360-degree view of your contract. 
  3. Complete a package assessment: Conduct a comprehensive review of your packaging practices, focusing on dimensional weight optimization. To identify potential savings, you can also test alternative packaging solutions for high-volume products.

Cut Shipping Costs: How Reveel Helps You Take Control of UPS Shipping Surcharges

Staying informed about UPS surcharge changes and industry best practices will remain essential for parcel shipping professionals seeking to maximize value and efficiency in their shipping operations.

The best way to support your business’s current needs and future growth is by leveraging Reveel’s PSM 2.0 technology-backed software. Reveel’s software saves you time and money by automating contract management processes, quickly identifying opportunities for savings, and optimizing your shipping operation. Request a demo here.

Get the latest information on UPS’s surcharges here.

Image credit: Ryan – stock.adobe.com