Recent triple threats to shipping costs: rates, surcharges and fuel fees
40% shipping rate increase impacting shippers
As of May 4, 2025, businesses are facing up to a 40% increase in shipping costs with UPS Mail Innovations. This spike is largely driven by USPS pricing changes that forced UPS to adjust its rates — putting additional financial pressure on shippers, especially those handling lightweight e-commerce packages.
New $1.75 surcharge for extended area deliveries
Starting May 11, 2025, a $1.75 fee will be applied to each package delivered to “extended area” ZIP codes. This surcharge mirrors UPS’s Delivery Area Surcharge (DAS) and will significantly impact businesses shipping to rural or less-accessible regions.
Fuel surcharges add another layer to shipping costs
Effective June 23, 2025, UPS will update its U.S. Ground Domestic, UPS Ground Saver®, and Domestic Air fuel surcharges. These surcharges, adjusted weekly, are based on the National U.S. Average On-Highway Diesel Fuel Price and the U.S. Gulf Coast Jet Fuel Price.
What e-commerce retailers should watch out for
Rising shipping costs are squeezing margins
The 2025 rate hikes, especially the 40% increase from UPS Mail Innovations and new surcharges, are hitting e-commerce retailers hard. Lightweight and high-volume shipments are becoming significantly more expensive, directly impacting profit margins.
Peak season risks and delivery delays
Cost increases aside, service reliability may be compromised during peak periods. Retailers should anticipate delays and prepare contingency plans to maintain a smooth delivery experience during high-demand months.
Reevaluate carrier partnerships
Now is the time to revisit existing shipping contracts. Negotiating better terms, switching to more cost-effective carriers, or adding regional delivery providers can help reduce overall logistics spend.
US shipping self-assessment checklist
| Cost-efficiency and budgeting | • Have my shipping costs increased due to lost USPS discounts? • Am I experiencing fluctuating last-mile delivery costs? • Do I have visibility on my total shipping spend per order? |
| Flexibility and scalability | • Can my shipping solution adapt to peak demand? • Do I have contingency plans if my primary carrier experiences disruptions? • Am I leveraging flexible regional solutions for faster delivery? |
| Lead times and reliability | • Are my packages arriving within the expected delivery window? • Am I experiencing delays due to peak season? • Do I need faster regional or nationwide shipping? |
| Last-mile & carrier diversification | • Am I over-reliant on USPS for last-mile delivery? • Do I have access to regional and alternative last-mile carriers? • Am I meeting customer expectations for 2-3 day delivery? |
CIRRO E-Commerce: smarter shipping alternatives to cut costs
As shipping rates continue to rise, CIRRO E-Commerce helps retailers stay competitive with two cost-effective delivery solutions: Standard and Regional Solutions. These solutions aredesigned to balance speed, flexibility, and full U.S. coverage.
Standard Solution
Built to meet the evolving demands of modern e-commerce, our Standard Solution leverages a nationwide logistics network with 100% coverage and integrates both postal and non-postal last-mile carriers. The result? An efficient, scalable delivery model that provides broad reach and optimized cost control.
Regional Solution
Need faster delivery in key metro areas? Powered by GOFO Express, our exclusive Regional Solution offers 1–2 day delivery across the U.S. regions. It’s tailored for time-sensitive e-commerce shipments, with seamless last-mile execution, smart SMS updates, and customer-first flexibility.
