Three Parcel Cost Pitfalls and How Smart Shippers Avoid Them in Q4 2025

Real World Wake-up Call

Last quarter, one of our clients noticed parcel costs rising by 12%. Shipment profile or volumes hadn't changed. The issue was layered surcharges and outdated contract language. After a focused audit and a few strategic moves, they corrected course just in time for peak season.

1. Base Rates Only Tell Part of the Story

What's Happening We all know about UPS and FedEx raising base rates by 5.9% this year. That doesn't include the additional Handling increases, fuel scale changes, payment processing fees, new DAS zip codes, oversized fees, and dimensional weight rounding rules which often hit your bottom line harder.

Quick Stats

• Residential surcharges are up 7.2 percent according to Sifted

• Additional Handling fees are up 26%+

• Fuel Surcharge Scale change has driven fuel up ~10%

• Dim rounding calculation change could mean 10% increase in weight or more

• DAS Extended Residential is up 7.8%

• Payment process fee = 2%

• Not to mention changing zones and the Peak Season surcharges just announced!

Smart Move Don't stop at base rate negotiation. Accessorials often make up 40% + of your package rates. Push back on surcharges and audit your invoices for unexpected fees.

2. The Oversized Surcharge Squeeze Is Real

What's Happening @Reveel reports that oversized parcel surcharges rose 21-29% this year. That’s a steep climb for shippers of large products

What to Watch Dimensional weight formulas are changing. Many shippers are paying for air without realizing it.

Smart Move Rethink packaging. Negotiate volumetric caps. Consider tiered surcharge limits in your next contract.

3. Peak Season Surcharges

What's Happening UPS and FedEx just announced peak seasonal surcharges are starting earlier and getting more pronounced on additional fees related to package size and peak demand “congestion” fees. 

What to Watch

Surcharge	Services Affected	Peak surcharge per package	Effective dates
Additional Handling	U.S. domestic, U.S. import and U.S. export shipments	$8.25 to $10.80	Sept. 28 - Jan. 17, 2026
Large Package Surcharge	U.S. domestic, U.S. import and U.S. export shipments	$90.50 to $107	Sept. 28 - Jan. 17, 2026
Over Maximum Limits	U.S. domestic, U.S. import and U.S. export shipments	$485 to $540	Sept. 28 - Jan. 17, 2026
Demand Surcharge	UPS Ground Residential, Air and Ground Saver packages	$0.40 to $2.05	Oct. 26 - Jan. 17, 2026

Smart Move These are all negotiable. Review your shipping patterns and package dimensions.  Target those fees that will apply to your business. Set the shipping plan with your carriers to avoid the demand fees when you go over your allocation. 

Summary Table: Real World Shipper Strategies

Cost Pressure	What’s Driving It	What to Do
GRI plus surcharges	5.9 percent GRI, rising fees	Audit charges. Negotiate caps.
Oversize fees	21–29% surcharge jump	Optimize packaging. Tier contracts.
Peak season hikes	Increasing holiday shipping fees	Demand waivers or change carrier mix….look at postal and regional carrier fit.

Why It Matters

• Peak Season Surcharges Extra fees from UPS and FedEx begin in October. If you’re not planning now, they’ll eat into your margin by December (Saltbox).

  
  

• Market Conditions The parcel sector has seeing slow growth, and postal and regional carrier pressure have offered shippers lower cost alternatives. Agility in how you route and rate packages is more important than ever. Don’t get caught shipping air when ground service has the same transit time at a much lower cost.

  
  

• Carrier Leverage is Shifting With capacity tightening, providers are usually less likely to make concessions late in the year. In the parcel segment, there is a brief window now to make changes. Volumes in this segment are soft.