FedEx and UPS Add Peak Season Surcharges Despite Weak Shipping Demand

In the U.S., every year-end shopping rush—from Thanksgiving and Black Friday through Christmas and New Year—brings peak season surcharges. It has become industry routine, and giants like FedEx and UPS are no exception.

But 2025 looks different. According to ShipMatrix, average daily volume this peak season will grow by less than 20% compared with early 2025—far below the nearly 100% surge in 2013 and 50% jump in 2020. Total deliveries are projected at 2.3 billion packages, only 5% more than 2024, mainly because the peak period is one day longer.

Despite this, UPS began charging $8.25 on September 28 for packages needing extra handling, rising to $10.80 on November 23. From October 26, ground parcels face a $0.40 surcharge and overnight air parcels $1.10, climbing to $0.60 and $2.05 a month later. FedEx, USPS, Amazon Logistics, and OnTrac announced similar fees, while at least 10 smaller carriers have not.

Critics say the move is short-sighted. Glenn Gooding of iDrive Logistics notes carriers are cutting staff and capacity yet demanding higher fees. Satish Jindel of ShipMatrix warns that without a demand spike, surcharges only push shippers toward alternatives such as Amazon, Walmart, and independents, with Uber and DoorDash also entering last-mile delivery.

The shift is already visible. In the first half of 2025, Amazon Logistics volumes rose 6.1%, FedEx grew 5%, while UPS dropped 5.4% and USPS fell 6.7%. An extra 102 million parcels were absorbed by Walmart’s private network or independents like OnTrac, Veho, Jitsu, and UniUni.

With Amazon investing $4 billion in faster delivery and Walmart and Target expanding local fulfillment, analysts warn the three legacy carriers risk losing ground. Jindel predicts that by 2027, Amazon, Walmart, and independents combined will deliver more parcels than FedEx, UPS, and USPS together.