U.S. diesel fuel prices rose 39% in March and are up over 50% from a year earlier, according to the U.S. Energy Information Administration. In response, shipping giants including United Parcel Service (UPS) raised their fuel surcharge by 27%, Federal Express (FedEx) added a 26.5% surcharge, Amazon is charging an extra 3.5%, and the U.S. Postal Service (USPS) announced its first-ever temporary price increase of 8% to cover soaring energy costs. These costs are soaring not just in ground transportation, but are also seen in air and sea carrier rates. Many small businesses lack the clout to negotiate a better deal with the shippers, and often have customers who are more price sensitive.
Business owners say that these soaring costs come at the worst time. Businesses spend years trying to cultivate loyalty in their customer base, but one price shock can destroy that relationship. Two price shocks can be fatal. The companies that absorbed the most price rises from tariffs, now find the least wiggle-room to absorb any fuel surcharges.
