Australia Post Fuel Surcharge Hits 19.5% in Second Hike This Year

Key facts

• Fuel surcharge on domestic parcels and StarTrack Courier rises from 12% to 19.5% on June 1.
• Surcharge on StarTrack Express and StarTrack Premium deliveries increases from 22.7% to 30.2%.
• This is the second increase in 2024; the surcharge rose from 4.8% to 12% on April 23.
• The changes affect contract customers who ship more than 2,000 parcels annually.
• MyPost Business, retail customers, letters, and unaddressed mail are exempt.
• Australia Post stated it is 'regularly reviewing and updating' surcharges in response to the fuel crisis.

A Second Blow for Businesses

Australia Post will raise its fuel surcharge on domestic parcel deliveries and StarTrack Courier services from 12 percent to 19.5 percent effective June 1, marking the second increase in just over two months. The surcharge on StarTrack Express and StarTrack Premium services will climb even higher, from 22.7 percent to 30.2 percent. For businesses that rely on the mail carrier to ship more than 2,000 parcels a year — the threshold for contract customers — the cumulative effect is severe. One small business owner, who pays Aus Post $1,500 a month for shipping, said the cost now exceeds what the business pays him. The increases follow a previous adjustment on April 23, when the base surcharge jumped from 4.8 percent to 12 percent. The StarTrack Express and Premium surcharge had been set at 15.5 percent before the April hike.

The Company's Rationale

In a statement released Friday, Australia Post described the move as a “necessary adjustment” reflecting the higher fuel costs it faces in an environment of persistent price volatility. The organisation said it is “regularly reviewing and updating” its surcharges in line with other Australian businesses grappling with the fuel crisis. “Our focus is on balancing cost recovery with affordability for customers, while also supporting our delivery partners,” the mail carrier said. It added that it continues to operate in “very challenging conditions.” The company did not specify how long the higher rates would remain in place, nor did it rule out further increases if fuel prices remain elevated.

Who Is Affected — and Who Is Spared

The surcharge increases apply exclusively to contract customers — those who ship more than 2,000 parcels annually. MyPost Business users, retail customers, and all letter and unaddressed mail services are unaffected. This distinction means that small and medium enterprises that have grown beyond a certain shipping volume bear the brunt of the cost escalation. For many, the surcharge now represents a significant portion of their operating expenses, squeezing margins that are already tight. Australia Post has not disclosed how many of its customers fall into the contract category, but the segment includes e-commerce retailers, wholesalers, and other high-volume shippers.

Timeline of Escalating Costs

The current fuel surcharge structure has undergone two sharp increases in 2024. On April 23, the domestic parcel and StarTrack Courier surcharge rose from 4.8 percent to 12 percent, while the StarTrack Express and Premium surcharge climbed from 15.5 percent to 22.7 percent. Just over a month later, on June 1, those rates will jump again — to 19.5 percent and 30.2 percent, respectively. The cumulative increase for domestic parcel customers since April is nearly 15 percentage points. Australia Post has not published a schedule for future adjustments, but its statement that it is “regularly reviewing” the surcharges suggests further changes could come if fuel prices remain volatile.

Wider Economic Context

The fuel surcharge hikes come amid a broader fuel crisis that has pushed petrol and diesel prices to multi-year highs across Australia. The country's reliance on imported refined fuels, combined with global supply disruptions and refinery closures, has left domestic transport costs highly sensitive to international oil price swings. Australia Post, as one of the nation's largest logistics operators, is particularly exposed. Its fleet of delivery trucks and vans consumes millions of litres of fuel annually, and the surcharge mechanism is designed to pass those costs on to customers. The company's decision to shield retail and low-volume customers suggests an effort to maintain affordability for occasional users, even as it seeks to recover costs from high-volume commercial clients.

Outlook and Unanswered Questions

With fuel prices showing no signs of sustained decline, businesses that depend on Australia Post face continued uncertainty. The surcharge increases are not capped, and the company has given no indication of when or whether they might be reversed. Some affected businesses are already exploring alternatives, including private courier services and regional distribution hubs, though switching logistics providers can be costly and disruptive. Australia Post has not responded to questions about whether it considered absorbing some of the fuel cost increases itself, rather than passing them on to customers. The company's statement emphasised the need for “cost recovery” while acknowledging the strain on its delivery partners.

A Structural Shift in Shipping Costs

The repeated surcharge increases represent a structural shift in the cost of parcel delivery in Australia, one that is likely to persist as long as fuel prices remain elevated. For businesses that have built their models around Australia Post's services, the higher charges may force changes in pricing, packaging, or even the viability of certain product lines. While the company frames the adjustments as a response to external conditions, the cumulative effect on small and medium enterprises is profound. The 30.2 percent surcharge on express services, in particular, may push some businesses to reconsider their reliance on premium delivery options. Australia Post's dual role as a public service and a commercial operator leaves it balancing competing pressures — and for now, the fuel crisis is tipping the scales toward higher costs for its most frequent users.

The bottom line

• Australia Post's fuel surcharge on domestic parcels will reach 19.5% on June 1, the second hike in two months.
• StarTrack Express and Premium customers face a 30.2% surcharge, up from 22.7%.
• Only contract customers shipping over 2,000 parcels per year are affected; retail and MyPost Business users are exempt.
• The company cites volatile fuel costs and says it is 'regularly reviewing' surcharges.
• the surcharges are eating into their margins, with some paying more for shipping than they earn.
• No timeline has been given for when the surcharges might decrease, and further increases remain possible.