The Most Expensive Peak Yet, and the First Without a Duopoly
Two things are happening in US parcel this week, and it is worth looking at them together rather than one at a time. The first is that surcharge season has started. UPS's peak fees took effect on 27 September, FedEx's on 28 September, USPS's temporary holiday pricing starts on 4 October, and the flat per-package fees that UPS, FedEx and Amazon Shipping add to residential and air services all land on 25 or 26 October. The second is that this is arguably the first surcharge season that is not being set by two companies. Amazon carried more parcels in the US than anyone else in 2025, the carriers that used to be called regional now reach most of the country, and a little over half of retailers ship with someone other than UPS, FedEx and USPS. So the fees are higher than they have ever been, and at the same time the number of places a merchant can send a parcel is larger than it has ever been. Both of those are true at once, and the retailers who do well this peak will probably be the ones who treat them as one problem rather than two.
Next week, at DELIVER America in Las Vegas, at least five sessions on the programme are about exactly this: Veho on rethinking how America delivers, AFMS on the parcel market outlook and contract strategy, eHub on navigating carrier complexity to protect margin, DHL on what it calls the carrier quagmire, and EasyPost on pressure-testing shipping decisions before they eat into profit. We will be there on 7 and 8 October, and if you are attending we would be glad to talk through what follows in person.
The calendar, network by network
It helps to have the dates in one place, because the fees do not all arrive at once.
UPS went first. According to Supply Chain Dive's report on 27 August, UPS's additional handling and large package demand surcharges applied from 27 September, the flat per-package fees on residential and air services start on 25 October, the highest tier runs from 22 November to 26 December, and everything stays in place until 16 January 2027. In the peak window the additional handling fee is $11.90 per package (from $8.75 in the earlier weeks), the large package surcharge is $117.50 (from $96.25), the over-maximum fee is $590 (from $530), and, per Descartes' 17 September summary of the same tables, the residential Ground and Ground Saver fee is $0.75 per package (from $0.50). Supply Chain Dive's comparison with 2025 puts the handling and size charges up by roughly 6% to 10% and the flat service-level charges up by roughly 22% to 25%. The same report notes that UPS's chief executive, Carol Tomé, said on the July earnings call that UPS expects its US volume to jump about 24% from the third quarter to the fourth.
FedEx follows a day later and almost line for line. Per Descartes' summary published on 17 September, from 28 September to 22 November FedEx charges $8.80 for additional handling and $95.75 for oversize, and from 26 October adds $0.50 per Ground residential and Home Delivery package and $2.55 per Ground Economy package. From 23 November to 27 December those become $11.85, $117.25, $0.80 and $4.05. The residential fee goes up by 60% between the early window and the peak window, and the Ground Economy fee by just under 59%.
USPS comes in on 4 October. The Postal Service's temporary holiday pricing, which per its filing as reported by MailOMG runs from 4 October 2026 to 17 January 2027 on Priority Mail Express, Priority Mail, Ground Advantage and Parcel Select, is a set of per-piece adders rather than a percentage. Reveel's analysis on 22 September calculated that the commercial adders are about 40% higher than last year's, with lightweight long-zone Ground Advantage up around 57%, and noted that they sit on top of an 8% base increase that took effect on 26 April. Set against the FedEx and UPS increases in the same guide, roughly 6% to 9% and 22% to 25%, lightweight parcels going a long way, which describes a lot of eCommerce, took the steepest increase of the three.
Amazon Shipping mirrors UPS and FedEx almost exactly. Supply Chain Dive reported on 3 September that from 25 October to 21 November Amazon Shipping adds $0.50 per package, $8.75 for additional handling, $96.25 for large packages and $530 for extra-heavy ones, that those rise to $0.75, $11.90, $117.50 and $590 from 22 November to 26 December, and that they fall back to the earlier levels from 27 December to 16 January. The one difference, and it is a meaningful one, is that Amazon Shipping has no volume-based surcharge for the second year running, whereas UPS and FedEx both tie their volume-based peak surcharges to a customer's baseline activity.
And next year is already priced. CEP Research reported on 22 September that FedEx will raise rates by an average of 5.9% from 4 January 2027, its fourth consecutive year at that figure, and will add a $25 paper document fee from 18 January.
Why "5.9%" understates it
The headline general rate increase has been 5.9% for years now, and it is not really the number that matters. At Logistics Management's parcel roundtable in May, Paul Yaussy of Loop said the effective increase for an average shipper is "closer to 8% to 9%, depending on their shipping profile", because so much of the increase sits in surcharges, minimums and accessorials rather than in the base rate. John Haber of Transportation Insight described the carriers' current strategy as "very focused on margins as opposed to volume growth", and Yaussy made the same point in a different way: neither UPS nor FedEx expects much volume growth in the near term, so the emphasis has moved to yield and revenue per piece.
That is the context for the surcharge numbers above. The fees that went up the most this year are not the big, rare ones on oversized freight. They are the flat per-package fees on ordinary residential parcels, which is to say on the shipments most eCommerce brands send most of. A $0.75 residential fee does not sound like much until it is applied to every package in the busiest five weeks of the year, on top of an 8% or 9% effective base increase, on top of fuel. FreightWaves reported in July, citing the TD Cowen/AFS Freight Index, that ground parcel rates during last year’s peak ran 34% above the 2018 baseline, and that the average surcharge climbs 13% from the third quarter to the fourth.
Very little of this is being passed to the customer, at least not visibly. Salesforce's holiday predictions, published on 20 July, expect retailers to spend an additional $3 billion globally this season subsidising free shipping, 7% more than in 2025. So the fees and the base increase are both real, and most of it is being paid by the retailer.
The duopoly is fading, and it went quietly
What is different about 2026 is the second half of the story. The same FreightWaves piece, drawing on ShipMatrix data published in March, put the 2025 US parcel volumes at 6.7 billion for Amazon (up 9.8%), 6.6 billion for USPS (down 8.3%), 4.4 billion for UPS (down 8.3%) and 3.6 billion for FedEx (up 5.9%), with the alternative carriers together at 2.6 billion, up 13%, in a market that grew 0.4% to 23.9 billion. Amazon is now the largest parcel carrier in the country by volume. Robert Persuit of ShipMatrix told Logistics Management's roundtable that UPS, FedEx and USPS together handled 85% of domestic parcel volume before the pandemic and 61% of the 23.9 billion deliveries in 2025.
Retailers have moved with it. FreightWaves reported the AlixPartners 2026 Home Delivery Survey, from June, as finding that 55% of retailers now use carriers outside FedEx, UPS and USPS, that more than a third are actively shifting volume away from FedEx and UPS, that more than 90% of the executives surveyed run a mix of last-mile carriers, and that 32% use four or more. The carriers on the receiving end of that are no longer regional in any useful sense of the word. Supply Chain Dive reported in February that GOFO, which reached over 70% of the US population and more than 8,500 ZIP codes at the time, planned to be at roughly 82% and 12,000 ZIP codes by the end of summer; that Veho had launched in Las Vegas and San Diego, opened hubs in Phoenix and Ontario, California, and was offering a product called FlexSave that trades a fixed delivery date for a lower price on a slightly wider window; and that UniUni had turned its attention from coverage to delivery quality. The phrase Supply Chain Dive used was that these providers are "shaking off the regional parcel carrier label". Amazon Shipping itself, per Yaussy at the roundtable, is probably "two to three years away" from being a full competitor to UPS and FedEx, but its holiday fee table is already indistinguishable from theirs, apart from the volume tier.
It is worth being careful about what this does and does not mean. It does not mean UPS and FedEx are optional for a national retailer; for most, they are still the backbone. It does mean that, for the first time, the surcharge tables are being set in a market where a merchant has somewhere else to send a residential parcel, and where the second and third options are credible on coverage. The fees went up anyway, which suggests the incumbents are pricing for yield and expect to lose some volume doing it. The question for a merchant is whether they are set up to be part of the volume that moves.
What the customer will tolerate
The reason this cannot be solved by simply choosing the cheapest option every time is the customer. The AlixPartners survey, as reported by FreightWaves, found that the longest a consumer will now accept for free shipping is 2.6 days, down from 3.4, that 88% say a late delivery that is not remedied weakens their future purchases with the retailer, and that 90% want to be told when a delivery is running late and given an updated arrival time. So a cheaper carrier that is a day slower, or that reports status less reliably, has a cost of its own, and it is a cost that shows up in the next order rather than on the freight invoice.
That is what makes this peak harder than the ones before it. The cheapest option is now quite often a carrier the merchant has not run at scale, the fee tables reward moving volume around within the season rather than committing to one network, and the customer expects the same tracking and the same promise whoever carries the parcel.
What the retailers who are ready look like
From the conversations we have with brands going into peak, the ones in good shape tend to have made a small number of decisions early.
They have modelled the effective cost, not the headline. The fees above are dated, they differ by service level and by whether a parcel is residential, and two of the four networks tie their largest surcharge to the merchant's own volume baseline. Last year's spreadsheet will probably not be right any more. The merchants who have loaded this year's fee tables against their own order profile know, roughly, which carrier is cheapest for which parcel in which week, and they are the ones who can act on the AlixPartners finding rather than just agree with it.
They have made the alternative carriers real options, before Black Friday. Adding a carrier in November usually turns into a project in its own right. Having it integrated, tested on live orders in October and held to the same tracking standard as the incumbents is what turns the 55% figure into money. Having many carriers is not the goal in itself; what matters is that the two or three that fit your parcel profile are ready to take volume on the day the fee tier changes.
They have decided in advance what moves and what does not. Some parcels should stay on the carrier that is fastest and most reliable for that customer regardless of the surcharge. Others, the lightweight, long-zone, non-urgent ones, are exactly what the alternative networks were built for. Writing that split down as rules, rather than leaving it to whoever is booking shipments in the busiest week of the year, is most of the work.
They have kept the customer promise independent of the carrier. If the tracking page, the notifications and the estimated delivery date look the same whether the parcel went with UPS or with a regional carrier, then the customer does not experience the diversification at all, and the merchant is free to move volume. If they do not, every carrier change becomes a customer service risk.
Where Carriyo fits
Most of what we do sits underneath those four decisions. Carriyo connects 130+ carriers through one integration, including UPS, FedEx, USPS and Amazon Shipping alongside the regional and alternative networks in the markets we serve, and the platform holds the cost, capacity and performance data across all of them in one place. That is what makes it possible to model this year's fees against your own orders, route by rule through peak, and keep tracking and notifications consistent whoever carries the parcel. On Friday we will go through how that works in practice, and specifically how a merchant absorbs a surcharge season like this one without re-platforming.
If you would like to look at your carrier mix and this year's fee tables together, get in touch with our team at carriyo.com/contact. We are happy to walk through what the last few peaks have taught us.
Carriyo is The Intelligent Commerce Platform, from checkout to doorstep.
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Sources
1. Supply Chain Dive. "UPS preps higher holiday surcharges for 2026", 27 August 2026. https://www.supplychaindive.com/news/ups-preps-higher-holiday-surcharges-for-2026/828936/ 2. Descartes. "FedEx and UPS Demand Surcharges: What Ecommerce Sellers Need to Know for 2026", 17 September 2026. https://www.descartes.com/ecommerce/news/fedex-ups-demand-surcharges-ecommerce-sellers-2026 3. MailOMG. "Rate Hike Holiday 6 Starts in October" (USPS temporary holiday pricing filing), 26 August 2026. https://mailomg.com/2026/08/26/rate-hike-holiday-6-starts-in-oct/ 4. Reveel. "2026 Peak Season Demand Surcharge Guide", 22 September 2026. https://reveelgroup.com/resources/peak-demand-surcharge-guide/ 5. Supply Chain Dive. "Amazon Shipping readies 2026 holiday delivery surcharges", 3 September 2026. https://www.supplychaindive.com/news/amazon-shipping-readies-2026-holiday-delivery-surcharges/829550/ 6. CEP Research. "FedEx leads 2027 rate increases", 22 September 2026. https://www.cep-research.com/2026/09/22/fedex-leads-2027-rate-increases/ 7. Logistics Management. "2026 Parcel Express Roundtable: From volume to value, parcel carriers are rewriting the playbook", 1 May 2026. https://www.logisticsmgmt.com/article/2026_parcel_express_roundtable_from_volume_to_value_parcel_carriers_are_rewriting_the_playbook 8. FreightWaves. "Carrier diversification unravels the last-mile delivery duopoly" (citing ShipMatrix, March 2026; AlixPartners 2026 Home Delivery Survey, June 2026; TD Cowen/AFS Freight Index), 29 July 2026. https://www.freightwaves.com/news/carrier-diversification-unravels-the-last-mile-delivery-duopoly 9. Supply Chain Dive. "Parcel delivery companies expand coverage, shed regional label in 2026", 26 February 2026. https://www.supplychaindive.com/news/parcel-delivery-companies-growth-coverage-2026/813114/ 10. Salesforce. "Holiday Retail Predictions 2026", 20 July 2026. https://www.salesforce.com/blog/holiday-retail-predictions-2026/ 11. DELIVER America 2026. Programme and agenda, 7–8 October 2026, Las Vegas. https://www.deliver.events/america/programme-agenda