The TD Cowen/AFS Freight Index projects shipping costs for UPS and FedEx will hit a record high in the fourth quarter of 2026. The Index forecasts the ground parcel rate per package will be 43.3% above the January 2018 baseline. Significant peak season surcharges drive this increase.
UPS increased its ground residential surcharges by approximately 25% year-over-year for the holiday period. These seasonal fees cover the costs of increased holiday volume. The fees will be in effect from late October 2026 through mid-January 2027.
Analysts note seasonal demand, elevated fuel surcharges, and general carrier pricing strategies contribute to increased shipper costs. Easing fuel prices provided some relief in the third quarter. However, new surcharges are expected to significantly tighten customer budgets during the busiest shipping period of the year.