Amazon has announced that it would levy 5% fuel and inflation charges on online sellers using its shipping services. Amazon’s move is an attempt to offset rising costs to its operations caused by inflation and rising fuel prices.
Gas price hike leads to fuel surcharges for Amazon sellers
According to the online shipping and fulfillment company, the new charges will take effect on April 28, 2022 and are subject to change. It also stated that the 5% surcharge would only apply directly to sellers and not to Amazon shoppers.
“We know that changing rates affect your business, and our teams work every day to ensure FBA [Fulfillment by Amazon] continues to be a great value for the premium fulfillment and delivery service it offers,” Amazon wrote in a message to third-party sellers.
The company said costs have risen since the start of the Covid-19 pandemic due to increases in hourly wages, hiring of workers and building more warehouses. But despite efforts to absorb costs where possible and remain competitive with other providers, the 5% fuel and inflation surcharge had to be levied.
Amazon’s announcement follows actions by other companies such as Uber and Lyft that have added fuel surcharges to rides. Uber announced that consumers would pay a $0.45 or $0.55 surcharge per Uber ride and $0.35 or $0.45 on each Uber Eats order. While Lyft has added a $0.55 fuel surcharge to each ride.
The news of the additional fees for ride shares comes in response to the rise in gas prices across the country after Russia’s invasion of Ukraine that had caused shocks in the prices of oil and other commodities. Currently, the average cost of a gallon of regular fuel has reached $4,074, according to AAA which rose around $2,862 last year.
Inflation-increasing costs for companies
In March, commodity prices in the US reached 8.5%, the highest level since 1981. In addition to rising inflation, fuel prices are almost doubling. Inflation causes nearly a third (31%) of small businesses to worry about their profitability. 72% of business owners say they need to raise prices to stay competitive.
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