U.S. holiday parcel costs set records as diesel-linked surcharges rise
Higher diesel-linked carrier surcharges are pushing U.S. holiday parcel delivery costs to record levels, increasing retailers’ seasonal fulfillment expenses.
A CTV News report published October 26 says U.S. retailers are heading into what is expected to be the costliest parcel-shipping year on record, with diesel-driven fuel surcharges lifting holiday delivery charges from UPS and FedEx. The immediate exposure is concentrated in retailers and other shippers that rely on parcel networks during the year-end sales period, when delivery pricing becomes a material part of fulfillment costs. [1]
The TD Cowen/AFS Freight Index projects fourth-quarter ground-parcel pricing, including for e-commerce shipments, will be 5.8 per cent higher than in the comparable period a year earlier. Express-parcel pricing is forecast to rise 13.8 per cent from the fourth quarter of 2025. The index draws on anonymized shipping data from 1,800 shippers, including major retailers, and reports percentage changes rather than dollar figures because package costs depend on factors such as size, weight and destination. [1]
The seasonal timing matters because holiday-related parcel volumes can double in the fourth quarter, according to the report. That volume increase can amplify the budget effect of higher carrier charges for businesses that use ground or expedited shipping for online orders, replenishment and customer deliveries. The report identifies fuel as a central issue in shipper cost considerations rather than describing a new tariff, trade restriction or carrier policy action. [1]
Diesel costs are the stated driver of the surcharge pressure. CTV News reports that the U.S. average on-highway diesel price was US$6.28 per gallon as of October 19, and that this was 65 per cent higher than before the rise cited in the article. Fuel-surcharge formulas can therefore transmit higher diesel prices into parcel rates even where the underlying shipment characteristics are unchanged. [1]
For the Canada-U.S. trade dashboard, the development is best treated as a downstream price signal rather than a change in the established tariff environment. It may add seasonal cost pressure for firms serving U.S. customers through parcel channels, but the supplied reporting does not quantify effects on Canadian exporters, identify a Canadian sector-wide impact, or establish that the diesel-price movement changes the exposure of the dashboard’s tracked industries. [1]
Significance is limited because the newly reported effect is a seasonal, downstream logistics-cost increase affecting U.S. retailers and parcel shippers, not a new bilateral trade measure. The reported 5.8 per cent ground and 13.8 per cent express price forecasts show a concrete business-cost consequence, but the source does not quantify Canadian industry exposure or demonstrate a broader change in trade conditions. [1]