Parcel shippers face record-high FedEx and UPS delivery prices in the fourth quarter, according to the TD Cowen/AFS parcel index — a benchmark that tracks what shippers actually pay per package across the two carriers' networks.

The record projection caps a quarter in which pricing pressure briefly eased. Two forces gave shippers room to breathe in Q3: fuel prices eased from their earlier peaks, and discounting activity rebounded as carriers competed for volume. That combination slowed the steady climb in delivered cost per package that has defined the index since the pandemic-era freight boom.

The reprieve ends now.

What changes in Q4?

Peak season surcharges are the mechanism. Both FedEx and UPS layer on demand surcharges and additional-fees programs during the October-to-January shipping window, and TD Cowen/AFS expects those charges to push average delivery prices above any level the index has previously recorded for the period.

For shippers, the sequence matters more than the headline. A Q3 in which effective rates softened is followed by a Q4 in which the same volumes cost more to move — meaning budget planning built on third-quarter run rates will understate fourth-quarter spend.

The commercial logic runs in both directions. Carriers are using surcharges rather than base-rate increases to capture peak revenue, which keeps published rate cards looking contained while realized prices climb. Shippers with strong volume commitments and negotiated caps on surcharges will feel the increase less; shippers buying at or near list, or shipping heavy, bulky or remote-delivery parcels, will absorb the steepest increases.

Why the Q3 relief was real — and temporary

The discounting rebound deserves scrutiny before anyone treats it as a trend. Carriers discount to win volume when network capacity is available, and Q3 — ahead of the peak — is precisely when that competition shows up. Fuel surcharges, tied to published indexes with a lag, mechanically declined as fuel prices eased.

Neither driver persists into Q4. Fuel surcharges adjust with the indexes, and peak demand surcharges are designed to price congestion, not to reflect it durably. TD Cowen/AFS frames the Q3 easing as a seasonal and cyclical pause, not a reversal of the multi-year trajectory of rising parcel costs.

That is the caveat to attach to any promise of relief: the same analysis that documents the Q3 softening projects the Q4 record.

What shippers should watch

The index's record projection implies several practical consequences:

• Q3 invoices are not a baseline for Q4 budgeting; surcharge exposure must be modeled separately from negotiated discounts.
• Contract terms that cap or waive specific peak surcharges will determine how much of the increase each shipper actually pays.
• Diversification beyond the two carriers becomes more valuable precisely when both peak pricing in tandem — though the index tracks only FedEx and UPS, so any saving from alternatives sits outside this data.

What the analysis does not say is equally relevant. It does not project how long the record pricing persists past the peak window, nor whether the discounting rebound returns in the first quarter once surcharge programs lapse. Both carriers have shown willingness in prior cycles to keep select accessorials in place after peaks end, and the index itself will test that again in early next year.

For now, the trajectory the data supports is clear: third-quarter relief, fourth-quarter record, and a first quarter that will show whether the peak surcharges were a seasonal spike or a new floor for delivered parcel cost.