The EIA diesel index, effective June 1, 2026, is $5.350 per gallon.
That’s down from the mid-May peak of $5.64 – a meaningful move in the right direction, driven by ceasefire optimism between the U.S. and Iran and the prospect of Strait of Hormuz traffic reopening.
Markets exhaled. Global oil prices have tumbled roughly 20% from their 2026 highs as peace talks progressed. Brent crude posted its worst month since the COVID-19 pandemic in May, falling nearly 19%.
Go ahead and feel good about that for a moment.
Now open your next UPS or FedEx invoice.
Here’s what the headlines aren’t telling you.
The fuel index fell. Your fuel surcharge almost certainly did not, not proportionally, and maybe not at all.
Here’s why.
Starting March 9, 2026, UPS increased its fuel surcharge table for the 11th time in under 30 months. Then again in April. The cumulative timeline includes fuel surcharge table increases in June 2025, November 2025, January 2026, and March 2026 – four increases in less than a year across different service categories.
Each table restructuring does the same thing: it widens the bands on the way down. The changes mean FSC will decline more gradually as fuel prices fall, keeping shippers in higher surcharge tiers for longer. Carriers engineered a ratchet. It clicks up fast. It releases slowly.
Most parcel contracts include fuel surcharge language tied to published index tables, which means these increases pass through largely automatically. If your agreement doesn’t include fuel surcharge caps, percentage limits, or index table locks, your effective cost per package is increasing at a pace unrelated to when your contract renews.
Read that again.
The math that matters right now.
On March 2, diesel was $3.897 per gallon. The fuel index effective June 1 is $5.350. That’s a 37% increase in the index over roughly 90 days.
Under the March 2026 UPS table, ground surcharges currently range from 21.00% to 24.00%. FedEx ground surcharges at this price level are also in the mid-20s, with the carrier’s table structured so that for diesel prices at and above $4.99 per gallon, the surcharge adjusts by 0.25% for each $0.09 change in price — meaning every small drop in fuel moves the needle only slightly, while every small increase moves it fast.
Fuel is one of the largest line items on your parcel invoice. It compounds against every other surcharge on the bill. A 23% fuel surcharge applied to an already-inflated base rate isn’t a fuel cost. It’s a multiplier.
What you should be doing right now.
The index drop is real. The question is whether you’re actually capturing it, or whether restructured surcharge tables, contract language, and carrier timing are absorbing the benefit before it reaches your P&L.
Three things to check immediately:
1. Pull your surcharge history for Q1 and Q2. Document where your FSC was when diesel was $3.90. Compare it to what you’re paying now that diesel has come off its peak. The gap tells you what the restructuring costs you.
2. Review your contract language. Does your agreement reference a specific carrier table, or a specific table as of a specific date? If carriers update the table mid-contract and your language doesn’t lock it in, you’re paying under a different set of rules than you negotiated.
3. Model the downside scenario. The ceasefire between the U.S. and Iran is still awaiting final sign-off, and analysts note there is “little evidence” of short-term improvement in tanker traffic through the Strait of Hormuz. Diesel could spike again. Know your exposure before it does.
The index moved. That’s good news. Whether it moved for you depends entirely on what your contract says and whether anyone is watching it.
We’re watching it. We audit surcharge accuracy, identify table-related discrepancies, and help shippers negotiate the contract language that actually protects margin when the index swings.
If you want to know what the June 1 index means for your specific shipping profile, let’s talk.
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