Amazon to Hit Canadian, US Sellers With Fuel and Logistics Surcharge

Amazon will impose a 3.5 percent surcharge on sellers in Canada and the United States soon as it grapples with higher operating costs amid a fuel price spike since the war in Iran began.

In a notice to sellers on April 1, the e-commerce giant said the fuel and logistics-related surcharge will take effect on April 17. Canadian and U.S. sellers using its Fulfillment by Amazon (FBA) service will be the first affected. Starting May 2, the charge will also apply to sellers using Buy with Prime in the United States and Multi-Channel Fulfillment services in Canada and the United States.

The Seattle-based company said the move reflects ongoing cost pressures it is facing. Its announcement came amid soaring global oil prices driven by the ongoing war in Iran, which has disrupted flow of oil and petroleum-based products and strained global logistics.

“Elevated costs in fuel and logistics have increased the cost of operating across the industry,” the company said, noting that it has “absorbed these increased costs so far.”

The company said the 3.5 percent levy is a temporary measure, though it did not specify an end date. It added that its plan to implement the surcharge is “similar to other major carriers, when costs remain elevated.”

United Parcel Service and FedEx have increased their fuel surcharges. The United States Postal Service announced on March 25 it was imposing an 8 percent fuel surcharge that would apply to packages to be shipped starting April 26. The surcharge would remain in place until Jan. 17 2027, it said.

Amazon said its latest surcharge will be calculated based on sellers’ fulfillment fees, and not on the sale price of their items being shipped. The company said this will help to “recover a portion of the actual cost increases we are experiencing.”

“Due to the work we have already done together to lower costs, this surcharge is meaningfully lower than other major carriers,” it added, noting that the charge will average US$0.17 per unit for FBA services in the United States, though the rate will vary based on the item’s size and dimensions.

This isn’t the first time Amazon has applied a surcharge to address rising operating costs this year. In January, the company raised fees on U.S. FBA services by an average of US$0.08 per unit sold.

The Associated Press contributed to this report.