How fuel-related surcharges could raise prices, hammer businesses: this might be the final straw

Amazon has announced a 3.5% fuel surcharge on its sellers, joining UPS, FedEx and the US Postal Service in a strategy meant to counter rising fuel costs amid the Iran war – but experts are warning it could raise prices and put some companies out of business.Starting April 17, Amazon will apply a new “fuel and logistics-related surcharge” to third-party sellers in the US and Canada that use the e-commerce giant’s fulfillment services, an attempt to offset a historic energy supply disruption that has sent oil above $100 a barrel and gasoline to $4 a gallon.Amazon has argued the surcharge is “meaningfully lower” than those from other carriers, adding that it will amount to just an average additional 17 cents per unit for shipments via Amazon’s fulfillment centers – but those surcharges could quickly pile up, especially on top of tariffs, experts said.“If you’re taking an extra 5% to 10% from tariffs, an extra 3.5% from this fuel surcharge … there are definitely gonna be some retailers where this might be the final straw and it actually pushes them into the red,” Alex King, founder of personal finance site Generation Money and a former international trade VP at Barclays, told The Post.Smaller, lower-price staples like laundry detergent, paper towels, toilet paper and cleaning supplies will be hit hardest by the new fuel surcharge, since sellers of those products typically operate with very tight profit margins, according to King.A surcharge of 17 cents might sound puny, but many of these smaller goods are bought in bulk, so third-party sellers shipping out thousands of packages each month could face thousands of dollars in added costs, according to supply chain experts.Larger retailers tend to have stronger margins and will likely be able to absorb the added costs, at least temporarily, but smaller businesses often have much less wiggle room.“Maybe 30%, 40% of sellers will have to pass some of the surcharge on,” Brandon Daniels, CEO of Exiger...