Gas price spikes could put a last-minute squeeze on holiday supply chains

Supply Chain Shakeup // September 21, 2026 Gas price spikes could put a last-minute squeeze on holiday supply chains By Anna Hensel Ivy Liu Below is the latest edition of Modern Retail’s Supply Chain Weekly newsletter, which goes out on Mondays at 10 a. m.

ET, and dives into all things logistics and supply chain during a tumultuous time for the retail industry. To receive this weekly in your inbox, click here. After months of sustained pressure from the Iran War, gasoline prices are starting to spike even higher ahead of the most critical sales period for many retailers.

The price of gas overall is up about 50% in the U. S. since the start of the conflict between the U. S. , Iran and Israel on Feb. 28. But last week, some states started to see alarming price increases on top of that. In Wisconsin, for example, the average price for a gallon of gas jumped 61 cents in just eight days.

In Nashville, gas prices surpassed $4 per gallon for the first time in three months. Gas prices are suddenly surging again, partially due to significant drone attacks on a pipeline that is Saudi Arabia’s primary way of transporting oil instead of going through the Strait of Hormuz.

“ Gas prices are about to take a big jump, analysts say, with the worst still to come,” a Washington Post headline proclaimed. All of this threatens to put a damper on the all-important holiday season. The good news is that many retailers have already brought most of their holiday inventory to the U. S. from overseas.

So, the disruption should be minimal, though carriers like UPS and FedEx will likely continue to increase fuel surcharges ahead of the holidays. Perhaps the biggest risk comes on the consumer front: If gas prices continue to rise, it could lead some consumers to cut back on their holiday gifting budgets.

Some may also buy more products online or consolidate in-person shopping trips to save money on gas. “Walk into Walmart or Target today, and you’ll already see Thanksgiving table settings and Christmas wreaths out,” logistics consultant Matt Hertz told Modern Retail.

Hertz is the CEO and founder of Third Person, a service that connects brands with fulfillment partners. So, from that perspective, “a big chunk of the holiday supply chain was ‘accomplished’ before this recent leg up in fuel prices,” he said. The risk, he said, lies in fuel surcharges.

Today, all the major carriers and even many of the regional carriers have some kind of fuel surcharge. In the past, it was fairly nominal. “When I started my career, [a fuel surcharge] was a few percentage [points],” Hertz said. “It was something that you didn’t even look at. So it’s historically been absorbed.”

But fuel surcharges have now hit, if not record highs, close to near-record highs. For domestic packages, FedEx is now charging a fuel surcharge of 32. 25%. Fuel surcharges are calculated weekly based on diesel and jet fuel prices. Brands can negotiate fuel surcharge rates with their carriers, Hertz said.

Another way brands can protect themselves is by relying on multiple carriers. “That’s been a very effective way of circumventing, or squashing, the impact of rate inflation and fuel surcharges,” Hertz said. Indeed, perhaps the biggest risk to retailers from rising gas prices involves what it could do to consumer demand.

Hertz wonders, for example, whether more shoppers will opt to buy more of their holiday gifts online and cut back on how much they drive to stores. If consumers find rising gas prices are eating into their holiday shopping budgets, retailers may have to rely even more on discounts to move product this holiday season.

“I think, in the event that demand is a little bit on the softer side, you’ll start to see much heavier promotional activity going into the holiday season, which will probably start as early as next month,” Marcus Shen, CEO of B-to-B resale platform B-Stock, said.

The good news, Shen said, is that “a lot of these retailers are ready” to adapt to any potential volatility during the holiday season. “For better or worse, for the last five or six years, they’ve seen a ton of volatility from both a supply and demand perspective,” he said. “They’re a lot more resilient maybe than they would have been pre-Covid.”

Breaking down this season’s peak surcharge fees In other carrier news, next week peak season surcharges also start to go into effect. These are the additional fees carriers institute between now and approximately mid-January to account for the extra volume they are forced to handle.

The highest surcharges typically hit right before the end of November (to coincide with the start of Black Friday) and run until the end of December. FedEx, UPS and USPS have all published detailed tables detailing this year’s peak season surcharges. Laura Behrens Wu, founder and CEO of Shippo, a multi-carrier shipping software provider for e-co