Understanding and Combatting Industry-wide Carrier Surcharges

Originally written 2022, Updated Sept 2025

There are hundreds of possible surcharges carriers can apply to your shipment, adding yet another layer of complexity to the already complex business of international shipping. It would be impossible to list them all, but being aware of some key surcharges can help merchants make smarter decisions when managing shipping options. 

At their core, surcharges reflect the carriers’ cost to deliver a package. In today’s environment which is shaped by escalating U.S. tariffs, reciprocal duties from trade partners, and intensifying customs enforcement, carriers are adapting quickly, and those costs often flow directly to merchants. With the U.S. ending its de minimis exemption, even low-value shipments are now subject to full customs clearance and duties, further amplifying cost and compliance risks.

Customs scrutiny is higher than ever, and shipments that fall afoul of classification, valuation, or documentation rules risk delays and unexpected fees. For merchants, awareness of these pressures is vital to prepare for peak season and protect margins. If you need more information, check out our Trade and Tariff Hub for the latest on global tariffs. 

With FlavorCloud, you can guarantee the best international shipping services and rates by tapping into our world’s largest Global Carrier Network with negotiated shipping and surcharge rates. Our technology considers everything, from tariffs to surcharges to customs fees, to present your customer with the lowest shipping cost at checkout and drive international growth for you. Our model is fully transparent, with no out-of-pocket surprises after the shipment leaves your warehouse. 

DEMAND SURCHARGES 

What used to be called peak season surcharges are now more broadly referred to as demand surcharges. Unlike the old model where extra fees only appeared during the holidays, today’s demand surcharges can be applied any time carriers face sustained high volumes or network strain. They have become a standard lever for carriers like UPS and FedEx to manage spikes in demand and they can be introduced, adjusted, or withdrawn with little notice. 

Both major carriers currently apply demand surcharges not only to general shipments but also to specific categories such as Additional Handling, Large Package, and Over Maximum Limit. For instance, UPS publishes set fees that vary by date window—an Additional Handling surcharge can range from about $8 to over $10 per package, while a Large Package surcharge can exceed $100, and shipments over maximum limits can incur charges of $500 or more.

FedEx applies similar surcharges for Additional Handling, Oversize, and Unauthorized Packages during its defined demand periods. In addition, some surcharges scale with shipper volume: exceeding baseline thresholds, particularly on residential or air shipments, can trigger higher costs. 

For merchants, the challenge is that these surcharges are variable, layered, and can compound quickly on top of transportation fees and other charges. A single shipment classified as “large package” and routed during a high-demand period could be subject to multiple surcharge types at once. 

With FlavorCloud, you don’t need to track every carrier update yourself. Our platform negotiates the lowest possible rates across our Global Carrier Network and automatically accounts for all demand surcharges in real time. That way, your customers see transparent landed costs at checkout, and you avoid surprise fees after the shipment leaves your warehouse. 

DEMAND PERIODS

One of the most important things to understand about demand surcharges is that they aren’t fixed. Carriers set demand windows, specific periods when surcharges rise or fall depending on overall network capacity and shipping volume. While the steepest increases usually align with the holiday rush around Black Friday and Christmas, carriers can introduce or adjust surcharges at any point if demand spikes unexpectedly. 

This means surcharge amounts can change several times over the course of peak season. A package shipped in late October may incur a lower fee than one sent in mid-December, even if the route and service type are the same. Carriers also sometimes use tiered thresholds, where surcharges grow higher once shippers exceed certain weekly or monthly volumes. For merchants, the key takeaway is that these fees are dynamic, variable, and time-sensitive planning shipping calendars, promotions, and fulfillment flows with these windows in mind can make a noticeable difference in costs. 

DDP FEES 

Shipments sent Delivery Duties Paid (DDP) create a significantly better customer experience than Delivery Duties Unpaid (DDU). This is because DDP reduces/eliminates cross-border clearance issues. With DDP shipments, the merchant has elected to take on the responsibility of paying the duties, taxes, and clearance fees assessed by the import country’s customs.

With FlavorCloud, we take on this responsibility on behalf of the merchant with a full landed cost guarantee unlike any other in the industry. Carriers facilitate the DDP process and clear shipments on behalf of the shipper. Carriers within the FlavorCloud network facilitate the DDP process and usually charge the higher of a percentage of the customs charges or a flat fee. FlavorCloud offers significantly discounted fees or eliminates them for merchants leveraging our network. 

REMOTE AREA SURCHARGES

Remote area surcharges are typically applied by Express carriers when a shipment is picked up or delivered to a location deemed to be “remote”. For instance, if you are shipping to the northwest territory of Canada, it will cost a lot more to deliver your package! Rural areas are by nature challenging to reach.

The surcharge is applied to the shipments to account for the additional transportation costs associated with picking up or delivering to an out-of-the-way location. This surcharge is also subject to an additional fuel fee (mentioned below). Understanding and verifying address information are critical to account for remote area surcharges. The FlavorCloud network dynamically determines these at time of checkout, so it is only applied when relevant. 

FUEL SURCHARGES 

Fuel surcharges are a standard part of international shipping and apply to nearly every shipment. While fuel prices no longer fluctuate as dramatically as in past years, carriers continue to adjust these surcharges regularly based on fuel markets and seasonal patterns. 

Because fuel surcharges are often applied on top of other fees, such as transportation or remote area surcharges, and they can significantly affect total shipping costs. Express carriers use the cost of fuel to determine the fuel surcharge percentage. The price of fuel changes frequently, and therefore these are constantly being updated.  Even a small percentage increase can compound quickly when layered across multiple shipments or surcharge categories. 

With FlavorCloud, you benefit from negotiated rates across our Global Carrier Network, ensuring fuel surcharges are always as low as possible. While fuel costs will always ebb and flow, our technology makes sure your customers see the most competitive shipping price at checkout. 

How to reduce fees this holiday season 

While demand surcharges and carrier fees can’t be avoided entirely, merchants can take proactive steps to minimize their impact during the busiest shipping months: 

• Right-size your packaging: Carriers often calculate fees using dimensional weight. Reducing excess space in your cartons helps avoid paying to “ship air” and lowers the chance of triggering oversize surcharges. 

• Collaborate with manufacturers: Small adjustments to product or packaging dimensions can make a big difference. Even trimming a few centimeters may keep a shipment below “large package” or “over maximum limit” thresholds. 

• Consolidate shipments strategically: Combining items into fewer parcels, when practical, helps reduce the total number of shipments exposed to surcharges. 

• Plan fulfillment around surcharge windows: UPS and FedEx publish demand surcharge schedules in advance. Shaping promotions and fulfillment timing with these windows in mind can help smooth out spikes and avoid the highest fees. 

• Diversify your carrier mix: Different carriers set different surcharge thresholds. Expanding your options gives you flexibility to route shipments in the most cost-effective way. 

• Use technology to stay transparent: Platforms like FlavorCloud automatically calculate and apply carrier surcharges at checkout, so your customers see an accurate landed cost upfront and you avoid absorbing surprise fees post-shipment. 

Conclusion 

With peak season planning around the corner and upcoming increases in volumes, it’s essential to be educated and prepared. 

If you would like to understand the impact of various shipping options for your account and explore alternate options in anticipation of holiday sales, reach out to your FlavorCloud expert or contacts us at support@flavorcloud.com. 

If you want to dive further into surcharges, here are reference guides from a few major carriers. 

DHL 

UPS 

Fedex Import 

Fedex Export 

FlavorCloud offers dynamic pricing, dynamic routing, and data-rich, AI-optimized international shipping. We offer the lowest shipping costs through our Global Carrier Network with guaranteed Delivery Duties Paid.