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SAN FRANCISCO (KGO) — The rising fuel costs amid the war in Iran mean it will cost you more to get packages delivered.
Starting April 17, Amazon will apply new surcharges to its sellers. UPS, FedEx, and USPS have also added fuel surcharges to counter rising fuel costs.
Rising fuel prices mean sticker shock at the pump for many drivers.
“It’s $137 dollars. That’s significant,” said Jill from Pleasant Hill. That’s how much it cost her to gas up on Sunday.
The Strait of Hormuz has remained closed since the U.S. and Israel began their war with Iran. It’s a critical shipping route for crude exports from major oil producers. The closure has pushed oil prices higher and driven up gasoline costs.
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To counter rising fuel costs, Amazon plans to tack a temporary 3.5% fuel surcharge on its third-party sellers.
“Transportation costs are a big factor there,” said Dr. Dima Leschinskii, a professor of Finance at Menlo College. “Every company that is involved and has logistics and they have to pay for gas, either they have to absorb this cost, or they will charge the third party that will provide this service. I’m not surprised this is happening, because at some point, Amazon will say we cannot absorb all this cost.”
The e-commerce giant is following in the footsteps of UPS, FedEx and the U.S. Postal Service.
Starting April 26, the USPS is slapping a temporary 8% price hike on certain packages, including priority mail shipments, because of increasing fuel prices.
MORE: California gas station charging $10 for a gallon of gas
That means customers may have to pay more for deliveries.
“That’s crazy,” said Stevie, a driver from San Francisco. “It’s going to slow people down from ordering stuff. Most definitely because you are already paying other costs on top of it.”
“One way or another, this is going to ripple through the supply chain and ripple through our pocketbooks,” said Professor Andy Tsay, a supply chain expert at Santa Clara University Leavey School of Business. “The higher oil prices are affecting shipping and logistics costs. Amazon, UPA, USPS. I don’t think there’s any escape. Mortgage rates are going up. Everyone is talking about affordability since before the presidential election and the geopolitical situation isn’t making things any better.”
Economic experts say as gas prices continue to rise, food delivery apps are also likely to consider fuel-related surcharges.
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