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For the first time in years, motorists are hitting the road in droves. Many are back in the office and their daily commute, and the summer trips are kicking off. But all that driving is going to cost a little more than it did before the pandemic (or even last year).
Indeed, the national average for a gallon of gasoline is now over $5 according to AAA — and some states are well over that threshold. That’s more than twice as much as in 2019, and about $2 more than the same time last year.
This increase has led many companies to rely on contracted drivers to add extra fees to help offset costs. You’ll see it every time you order local delivery or rideshare, as Uber, Lyft, and even Instacart have all added extra charges in the name of fighting rising gas prices. Many restaurants with drivers have also added their own fuel surcharges.
Fuel price hikes mean delivery costs have risen
As if prices at the pump weren’t enough, the rising cost of fuel is also hitting many of us at home. Rising fuel prices mean shipping costs increase and retailers pass these costs on to customers.
UPS fees, for example, have increased significantly this year. International shipper fuel surcharges have jumped 3 percentage points since March. It now stands at 18% for land transport, the highest in the last 90 days.
In response to rising costs, some online retailers have increased shipping prices, as well as specific gas surcharges added to certain orders. And, as gasoline prices continue to climb, fuel-related delivery surcharges may become increasingly common for smaller retailers who simply cannot afford the cost of higher delivery charges. students.
However, it’s not just the little guys. Even retail giant Amazon, which has a major contract with USPS, not to mention its own fleet of delivery vehicles, has faced higher shipping costs.
Someone pays, somewhere
Of course, you can’t assume you’re safe just because you don’t see a gas-specific charge. When retailers pay more, so do customers. If the shipping price is not higher, the item price probably will be.
For example, Amazon recently hit sellers with a 5% “fuel and inflation” surcharge on its fulfillment service. This applies to all sellers who say “Fulfilled by Amazon”. Since many of these items ship for free with Prime, the only way a seller can offset the cost is to increase the price of the item itself.
So while your Prime deliveries are still free, your purchase price has likely increased. And the same is probably true at major retailers at all levels. Anywhere that maintains its free shipping policies will make a difference somewhereand raising prices is usually the easiest solution.
Picking up your purchases can make more sense
While you don’t have much recourse for higher product prices—other than being a more diligent comparison shopper—increasing shipping costs may have a workaround: picking up orders.
Many major retailers offer the ability to order online and then pick up your purchase in store. Depending on delivery costs (and your vehicle’s gas mileage or public transit costs), it may make more sense to drop by the store to pick up your order. This applies to retail purchases, as well as restaurant and grocery orders.
And, if you don’t already have a good gas rewards credit card, it might be time to add one to your wallet. Earning an extra 3-5% on gas won’t bring you back to 2019 prices, but it can definitely help stretch your gas budget a bit.
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