Amazon Is Passing Rising Fuel Costs on to Sellers With New Fee

When energy prices go up, it gets more expensive to ship things. That might make sense, but it doesn't make fuel surcharges any more fun. Amazon has announced that it will be instituting just such a fuel surcharge for sellers.

The news of the surcharge has many wondering what it might mean for the price of goods on Amazon, and for inflation as a whole. Here's what we know about the surcharge and what is motivating it.

Amazon announced that it would be adding a “fuel and logistics-related surcharge” of 3.5% to third-party sellers who use Amazon's fulfillment services to ship their packages. The surcharge is set to take effect on April 17, according to CNBC.

“Elevated costs in fulfillment and logistics have increased the cost of operating across the industry,” Amazon wrote in a note to sellers.

“We have absorbed these increased costs so far. However, similar to other major carriers, when costs remain elevated, we implement temporary surcharges on our fulfillment fees to recover a portion of the actual cost increases we are experiencing," the note continued.

Perhaps unsurprisingly, Amazon did not offer a political explanation for the increase in energy prices, but it is almost undoubtedly tied to the closure of the Strait of Hormuz and the surge in oil prices that has resulted.

The new surcharge might hit sellers first, but it will likely also mean that the price of goods on Amazon are going to increase as a result of the increase in fulfillment costs. Ultimately, both Amazon and the third-party seller need to turn a profit in selling their goods, which likely means that, most of the time, the costs of these fulfillment surcharges get passed in whole or completely on to consumers.

Amazon claims that its surcharge is actually meaningfully lower than those provided by other fulfillment centers, and it's certainly true that they aren't the only shipper instituting one. The United States Postal Service (USPS) has also said that it will begin instituting a fuel surcharge on April 26. That change is an 8 percent increase, which is substantially more than the one Amazon is planning to charge.

"This temporary price adjustment will provide needed flexibility for the Postal Service by helping to ensure that the actual costs of doing business are covered, as required by Congress," the USPS said. "While this price increase is a time-limited adjustment, it will provide a necessary bridge to a permanent mechanism to reflect market conditions in prices for competitive products."

This means that, even as costs rise at the gas pump, a surge in energy prices is also affecting the cost of shipping and receiving goods. Energy prices are important to many aspects of the economy, and if the Iran War continues, we could see inflation surge in multiple sectors that rely on fuel to get their products from one place to another.