It has never cost more to ship a parcel than it will this peak season.
A quarterly analysis from transportation cost management and auditing company AFS Logistics and TD Cowen projects a 5.8 percent year-over-year increase in the ground parcel rate-per-package index, which measures the all-in cost to ship a ground parcel, benchmarked to January 2018.
The index is 43.3 percent above the baseline from eight years ago, while the express parcel index is up 20.3 percent, marking a fifth straight quarterly record.
The index draws on AFS Logistics data covering more than $11 billion in annual spend and measures predictive pricing for parcel, truckload and less-than-truckload (LTL) transportation markets across 1,800 companies.
For holiday shippers, the immediate pressure comes from demand surcharges that are set to escalate in late November. Ahead of the season, UPS raised its ground residential surcharge 25 percent to 75 cents per package and lifted handling and large-package fees for the Nov. 22-Dec. 26 window, mirroring FedEx’s schedule, which raised its ground residential fee 23.1 percent to 80 cents.
“For shippers, peak season involves a year-long tight-rope act of balancing volume across carriers to maintain access to capacity when orders really need to move and to limit the impact of demand surcharges that incrementally penalize volume that exceeds baselines established earlier in the year,” said Mingshu Bates, chief analytics officer and president of parcel at AFS Logistics. “The holiday peak also tends to accelerate the trend of alternative carriers continuing to gain share from the large incumbents, as shippers diversify to shield themselves from capacity risk and surcharge impact.”
Underneath sits a structural change in how parcel carriers are pricing fuel. Diesel averaged $2.91 a gallon against a 7.75 percent fuel surcharge, yet by September 2026 diesel had hit a record $6.53 while the surcharge reached 30 percent. Of that 22.25-point increase, AFS calculates that 16 points came from carriers rewriting surcharge tables and only 6.25 from the pump, meaning shippers would pay 23.75 percent extra even if diesel fell back to $2.91.
“While diesel and jet fuel are major costs for ground and express parcel, the fuel surcharge has become a revenue lever for carriers in addition to a pass-through mechanism for covering the cost of doing business,” Bates said. “Even if crude oil normalizes and fuel prices recede, the effective fuel surcharge will not show a material decrease.”
U.S. on-highway diesel fell for a third straight week to $6.179, down 35 cents from the September record, according to the U.S. Energy Information Administration (EIA).
The FedEx general rate increase (GRI) effective Jan. 4, 2027 adds another layer to the elevating costs. The 5.9 percent average increase marks the fourth consecutive year at that figure, and it reclassifies 2,533 ZIP codes from an “extended” delivery area surcharge to the priciest “remote” delivery area surcharge tier. For affected destinations, the fee rises to $17.75, roughly doubling residential charges and more than tripling commercial ones.
UPS has yet to announce their 2027 GRI.
Both carriers are discounting more aggressively while protecting margins, though the discounts skew toward large customers and widen the gap between headline rates and what smaller shippers pay.
The index has reflected the stronger pricing power the trucking industry has wielded throughout 2026.
AFS puts the broader truckload rate-per-mile index at 23.4 percent above the January 2018 baseline in the fourth quarter, up 14.7 percent year over year and the highest since the first quarter of 2022, driven by shrinking capacity rather than demand.
Less-than-truckload is projected to set its third straight quarterly record at 82.5 percent above the 2018 baseline.
“Underlying LTL demand remained soft in 2026,” said Mich Fabriga, vice president of LTL pricing at AFS Logistics. “But through the combination of spiking fuel prices and a sustained commitment by carriers to prioritizing only profitable loads that fit their networks, LTL pricing has remained exceptionally strong.”
J.B. Hunt surcharge revenue soars 74 percent upon surging fuel costs
J.B. Hunt’s Thursday third-quarter results align with the trucking side of the index. Revenue rose 20 percent to $3.7 billion and diluted earnings per share came in at $1.82, ahead of the $1.77 midpoint implied by the company’s previously issued guidance. Fuel surcharge revenue soared 74 percent to $670.8 million while fuel and fuel tax expense rose 59 percent to $260.4 million, yet operating margin still compressed to 6.7 percent from 7.9 percent.
“Fuel surcharge programs recover costs over time, although rapid movements create a timing mismatch and dilute margins,” chief financial officer Brad Delco said on the earnings call. Intermodal revenue per load rose 11 percent with fuel surcharges but only 2 percent without them. Parcel carriers turned the surcharge into a revenue lever through table rewrites, while J.B. Hunt’s pain comes from surcharge lag, where fuel swings outrun the catch-up.
The trucking and transportation company absorbed more than $50 million in sequential cost headwinds, led by driver and medical costs. CEO Shelley Simpson said the pressure “typically yields a much better pricing environment for the next bid season.”
Shippers are shifting freight to rail where they can, with intermodal volumes rising 8 percent in the quarter. Strong demand in J.B. Hunt’s Eastern network sent road-to-rail conversions up 18 percent.
According to Spencer Frazier, executive vice president of sales and marketing at J.B. Hunt, the spread between highway and intermodal rates is more than double the roughly 15 percent historical norm.
“That creates an opportunity as long as we have reliable, consistent service and capacity, which we do,” said Frazier. “We do know that reliability today is winning over the lowest rate.”