Gas Is Cheap, so Why Are We Still Paying Fuel Surcharges for Shipping and Travel?


What's Hot


2 Types of Black Marks Might Vanish From Your Credit File SoonBorrow

6 Ways the Obamacare Overhaul Might Impact Your WalletInsurance

7 Dumb and Costly Moves Homebuyers MakeBorrow

This Free Software Brings Old Laptops Back to LifeMore

Obamacare Replacement Plan Gets ‘F’ Rating from Consumer ReportsFamily

Beware These 12 Common Money MistakesCredit & Debt

21 Restaurants Offering Free Food Right NowSaving Money

17 Ways to Have More Fun for Less MoneySave

House Hunters: Beware of These 6 Mortgage MistakesBorrow

30 Household Uses for Baby OilSave

25 Ways to Spend Less on FoodMore

Nearly Half of Heart-Related Deaths Linked to These 10 Foods and IngredientsFamily

5 Surprising Benefits of Exercising Outdoors in WinterFamily

10 Ways to Save When You’re Making Minimum WageSave

Boost Your Credit Score Fast With These 7 MovesCredit & Debt

7 Painless Ways to Pay Off Your Mortgage Years EarlierBorrow

The Most Sinful City in the U.S. Is … (Hint: It’s Not Vegas)Family

The True Cost of Bad CreditCredit & Debt

10 Companies With the Best 401(k) PlansGrow

This Scam Now Tops ID Theft as the No. 2 Consumer ComplaintFamily

6 Stores With Awesome Reward ProgramsFamily

6 Ways to Save More at Lowe’s and The Home DepotSave

6 Healthful Treats for Your DogFamily

New Study Ranks the Best States in the U.S.Family

Thousands of Millionaires Moving to 1 Country — and Leaving AnotherGrow

Strapped for College Costs? How to Get the Most From FAFSABorrow

6 Overlooked Ways to Save at Chick-fil-AFamily

Ask Stacy: What’s the Fastest Way to Pay Off My Mortgage?Borrow

Where to Sell Your Stuff for Top DollarAround The House

8 Ways to Get a Good Price on a Shiny New AutoCars

Ask Stacy: How Do I Start Over?Credit & Debt

Secret Cell Plans: Savings Verizon, AT&T, T-Mobile and Sprint Don’t Want You to Know AboutFamily

30 Awesome Things to Do in RetirementCollege

14 Super Smart Ways to Save on TravelSave

The Rich Prefer Modest Cars — Should You Join Them?Cars

You’ll Soon Pay More to Shop at CostcoSave

10 Ways to Save When Your Teen Starts DrivingFamily

Learn how to save on your travel and shipping even though these fees (created when oil prices spiked) seem to be a permanent fixture.

In 2016, we need to update the old saying that nothing is certain except death and taxes: We can now add fuel surcharges to that list.

Sure, we all know that one of the biggest expenses of moving packages – or people – from A to B is fuel. In fact, about 30 percent of airline expenses are for fuel, according to NPR. So it made sense when shippers and transporters – faced with  soaring fuel prices a decade ago – started adding fuel surcharges to bills. Since then, however, gas prices have plummeted: At an average $1.80 a gallon they are lower than they’ve been since 2009, according to the Denver Post. But we are still paying fuel surcharges. What gives?

If you wonder that, you aren’t alone. The chairman of Travelers United, Charlie Leocha, sent a letter to the airlines asking them to lower airfares in response to the decrease in fuel costs, reported NPR.

“It seems to have absolutely no connection with reality,” Leocha told NPR, noting that airlines never explained when fees would be lowered. “It’s just a random fee the airlines vary as they want to.”

Airlines have their own logic, however.

Jean Medina, a spokesperson for the Airlines for America lobbying group, said each carrier decides what fees to tack on and those fees – even if they’re deemed “fuel charges” – can be used to cover any expenses.

“While airlines are reporting profits, it’s modest,” Medina told NPR. “While fuel has come down, other costs have been increasing — costs of labor, cost of aircraft rent, cost of buying new planes.”

While that may be true for some carriers, it’s not for American Airlines, the world’s largest. Indeed, it had a record-breaking third-quarter profit with net income that jumped 80 percent to $1.69 billion thanks to a huge drop in fuel spending, reported the Associated Press.

It’s not just airlines that impose surcharges. Many companies charge such extra fuel fees including taxicab companies ($1.25 per trip in Philadelphia, for example), UPS (a fluctuating rate depending on fuel prices) and FedEx (also fluctuating).

And, like airlines, many companies that impose fuel surcharges reap profits. UPS this week reported profits nearly tripled in the fourth quarter, exceeding analysts’ expectations, the Wall Street Journal reported.

FedEx is also reporting solid profits on the back of surging e-commerce. The company said its volume was up by 9 percent a day in the quarter that ended Nov. 30. Like UPS, FedEx is now charging not just for weight, but also for size — because many packages are light, but take up a large amount of cargo space. Some of that base increase is being offset by continued “fuel surcharges,” the company said. That suggests the fuel fees on shipping may shrink, but they won’t go away any time soon.

There are examples of some surcharges falling away, though this tends to happen slowly. NPR reported that taxis in Atlanta were charging a $2 fuel fee, but a city law forced them to lift it once the price of gas dropped below $2.90. Virgin Australian Airlines announced in January that it would drop the fuel surcharge on its flights to the United States, the report said. In December, the Nevada Taxicab Authority revoked a surcharge it had imposed in 2011, according to Philly.com.

In the meantime, here are some tips to help you minimize or avoid these lingering surcharges.

  • Research airlines: Not all of them impose fuel surcharges. The Points Guy has a list of airlines and surcharges, but don’t forget things change quickly. Check the airlines’ websites, too. Tip: Remember that fuel surcharges on some awards tickets can cost you hundreds of dollars. Ask before you invest in an awards program.
  • Ask before joining the taxi line: Some cities impose fuel surcharges on taxi drivers. Others don’t. And options like Uber and other public transportation abound. Plan ahead and ask before you decide on transportation.
  • Consider shipping options: You might not be able to beat fuel surcharges on all shipping, but you can cut other costs. What many people don’t realize is that items shipped with slower delivery times (and at much lower costs!) often arrive only a day or two later than the more expensive methods, reports Simple Dollar. Also, in step with the trend towards “dimensional” shipping fees, use the smallest box or packaging feasible to protect and transport your package.

Do you have tips for saving on transportation and shipping costs? Share with us in comments below or on our Facebook page.

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!

💰🗣📰

Read Next: Wronged by Your Airline? This Little-Known Advocate Can Help

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 2,067 more deals!