UPS has quietly rolled out a new surcharge for packages containing Russian aluminum, catching many customers off guard with unexpected fees reaching $200 or more. The shipping giant implemented these charges following the Biden administration’s decision to raise tariffs on Russian aluminum to 200% earlier this year, part of broader sanctions responding to the ongoing Ukraine conflict.
My investigation into this development began after receiving reports from several small business owners who suddenly faced substantial new fees on routine shipments. Martha Keller, who runs a custom metal fabrication shop in Pennsylvania, discovered a $217 surcharge on her October invoice for a package containing specialized aluminum components.
“I’ve been shipping the same materials for years,” Keller told me during a phone interview last week. “There was no warning this was coming. It’s completely disrupted my pricing model.”
The Treasury Department’s Office of Foreign Assets Control (OFAC) initially announced the aluminum tariffs in February, but UPS only began systematic enforcement this month. According to Federal Reserve economic data, aluminum prices have already increased 14.7% since January, creating significant pressure on industries from construction to consumer electronics.
A UPS spokesperson confirmed the implementation of these charges when I contacted them, stating: “We’re required to comply with all applicable trade regulations, including tariffs on Russian-origin materials. These charges reflect our commitment to regulatory compliance while ensuring continued service to our customers.”
What’s particularly troubling for customers is the identification process. UPS appears to be flagging shipments based on both declared content and random inspections, leading to inconsistent application. Some businesses report receiving the surcharge on one shipment while identical packages sent days later passed without additional fees.
Financial analysts at Goldman Sachs project these tariffs could add approximately $1.2 billion in costs across U.S. supply chains annually, with small and medium businesses bearing a disproportionate burden due to their limited ability to absorb or pass along price increases.
The complexity lies in determining aluminum origin. Many manufacturers and distributors mix metal from various sources, making it difficult to verify whether products contain Russian aluminum. The London Metal Exchange reported Russian producer Rusal supplied approximately 6% of global aluminum before sanctions, creating widespread material distribution throughout global supply chains.
“It’s nearly impossible for end-users to know definitively where their aluminum originated,” explained Carlos Ramirez, metals market analyst at Bloomberg Intelligence. “The current system essentially forces businesses to prove a negative or pay the tariff.”
Several industry associations have raised concerns about implementation. The National Association of Manufacturers submitted formal comments to the Department of Transportation, arguing the current enforcement mechanism creates “an undue burden on businesses with no connection to Russian markets.”
For many UPS customers, the first awareness of the issue comes at invoice time. Unlike other specialized handling charges that appear during shipping quote calculations, these tariff surcharges are applied post-shipment, creating unpredictable cost increases.
Martin Feldstein, economics professor at Harvard University, noted in our recent conversation that such tariff mechanisms often create “cascading effects throughout supply chains that exceed the intended impact on targeted entities.”
The Bureau of Economic Analysis estimates that American industries consuming aluminum employ over 700,000 workers across manufacturing sectors. Many of these businesses operate on thin margins, making unexpected shipping cost increases particularly damaging.
Rebecca Torres, owner of a lighting fixture company in Arizona, shared her frustration: “I’m suddenly paying more to ship a product than the product itself costs. We’ve had to switch carriers for anything that might contain aluminum, but that means juggling multiple shipping accounts and logistics systems.”
UPS has established an appeals process for customers who believe charges were applied incorrectly, but several business owners described it as “cumbersome” and “time-consuming,” requiring detailed documentation about material sourcing that many simply don’t have.
The situation highlights broader challenges in implementing geopolitically motivated trade restrictions in complex global supply chains. The Commerce Department acknowledges these difficulties, with an agency representative telling me: “We recognize implementation challenges exist and are working with carriers and importers to refine compliance mechanisms.”
For now, businesses shipping metal products face a difficult choice: absorb unpredictable new costs, increase prices for their customers, or undertake extensive supply chain reviews to certify material origins.
As one metal distributor aptly summarized: “We’re caught between geopolitics and economics, with very little clarity on how to navigate either.”
