Fact Check Team: Are companies using the Iran war to quietly raise prices?

WASHINGTON (TNND) — As the war with Iran drives up fuel costs, American businesses and consumers are facing another expense: higher fuel surcharges on shipping and transportation.

But are those fees simply covering higher fuel costs — or are some companies using the conflict as an opportunity to boost profits?

A Reuters investigation found evidence that at least some transportation companies are collecting more from fuel surcharges than they are spending on fuel.

Union Pacific’s fuel surcharge revenue exceeds fuel costs

The clearest example comes from railroad giant Union Pacific.

In the second quarter of 2026, Union Pacific collected $91.1 million more in fuel surcharge revenue than it paid for fuel. The company said that difference contributed $83.2 million to its profit, or about 14 cents per share.

That doesn’t necessarily mean Union Pacific was illegally overcharging customers. Fuel surcharges are generally designed to help transportation companies recover fluctuations in fuel costs, and the formulas used to calculate them don’t necessarily match a company’s fuel expenses dollar-for-dollar.

But the difference does raise a legitimate question: when a surcharge produces additional profit, how closely is it tied to the actual cost of fuel?

Railroads offer an unusually good window into that question. According to Reuters, U.S. railroads are the only major transportation providers required to report both fuel costs and fuel-surcharge revenue to federal regulators.

The Surface Transportation Board publishes quarterly fuel-surcharge reports covering major freight railroads.

UPS and FedEx surcharges have climbed sharply

The issue isn’t limited to railroads.

UPS and FedEx have also substantially increased their fuel-surcharge percentages in recent years.

According to an analysis by AFS Logistics cited by Reuters, when diesel averaged about $3.35 per gallon in August 2021, UPS charged roughly 9% of the base shipping rate as a fuel surcharge for everyday residential and business packages.

Today, that surcharge is approximately 24.25% for UPS and 23.75% for FedEx, according to the Reuters analysis.

That means the surcharge percentage has more than doubled since 2021.

But there’s an important distinction: a surcharge percentage doubling does not mean the total cost of shipping has doubled. The percentage is applied to the underlying shipping charge.

And both companies say their fuel surcharges are tied to fuel-price benchmarks.

UPS says its domestic ground surcharge is based on the national average U.S. on-highway diesel price and is adjusted weekly. Its domestic air surcharge is tied to the national average U.S. Gulf Coast jet-fuel price.

FedEx similarly says its ground fuel surcharge is based on the weekly national average price of diesel, while other services use jet-fuel benchmarks.

FedEx’s own historical data shows its U.S. ground fuel surcharge at 26% during the week of August 17, 2026, with rates fluctuating throughout the summer.

So, are companies price gouging?

The evidence does not establish a broad, industry-wide price-gouging scheme.

There is a real increase in fuel costs associated with the Iran conflict, and transportation companies are legitimately facing higher energy expenses.

At the same time, there is evidence that some companies are collecting more through fuel surcharges than they spend directly on fuel. Union Pacific’s $91.1 million difference is the clearest example.

UPS and FedEx have also raised their surcharge percentages substantially compared with 2021, although the companies say fuel surcharges have not been a major driver of their profits. Reuters reported that UPS described the net impact on operating profit as “modest,” while FedEx said fuel surcharges were not a material driver of adjusted operating income.

So the most accurate conclusion is more nuanced than simply saying companies are “profiteering from the war.”

Fuel costs really are higher. But in some cases, fuel surcharges are generating additional revenue beyond a company’s direct fuel expense — raising questions about how closely those fees track actual costs and how much of the increase is ultimately passed on to consumers.

What consumers should watch

Fuel surcharges can ultimately affect the price of everything transported through the supply chain — from packages and manufactured goods to food and other consumer products.

The key question isn’t simply “Did the surcharge go up?”

It’s “How much did the company’s actual fuel costs go up, how much did the surcharge increase, and what happened to the difference?”

That distinction is at the heart of the debate over whether the Iran war is simply making transportation more expensive — or giving some companies an opportunity to increase their profits.