Logistics costs climb as Blue Dart sets 9-12% domestic rate hike

Carriers start passing on the bill

India's festive shopping season is bringing the usual surge in orders. This year it is also bringing a wave of higher logistics prices. Logistics providers are raising rates or weighing festive surcharges because labour, warehousing and last-mile delivery costs keep rising. E-commerce brands and sellers now have to choose between absorbing those costs and passing them on to shoppers.11 Blue Dart has announced a 9-12% increase across its domestic portfolio, effective 1 January 2027. Mumbai-based warehousing and fulfilment firm Emiza has raised its prices by 10-15% over the past few months.11 Blue Dart has said the January increase will not apply to new customers who sign up between October and December 2026. That reads as an effort to win business during the peak while its existing customers prepare for the higher rates.12

Other firms are taking a less uniform approach. Zippee, a logistics provider focused on quick commerce, is considering festive pricing adjustments only in regions where demand and operating needs justify them. Its founder says order volumes across its network have grown 4.5 times during the festive period.11 Delhivery acted earlier and added a network surcharge of ₹4 per express shipment and ₹2 per surface shipment from 1 September 2026. One merchant-tools vendor estimates this raises overall costs by roughly 5-10% for parcels over 500g.28

The overall picture is that the logistics industry has stopped absorbing cost increases. The timing of the changes shows the strategy. Most of the headline hikes start in January, and in the meantime carriers are relying on targeted surcharges. That lets them protect festive volumes while making sure the higher prices stick once demand eases.

Labour is the pressure that started the squeeze

The Indian coverage agrees that labour costs are the main driver, ahead of fuel. Emiza's chief executive traced the problem back to April and May. Disruptions in LPG and fuel supply that spring reduced the number of workers available at several locations, and the company covered the gap with overtime and local hiring. Statutory wage revisions in states such as Haryana raised costs at around the same time.11 Those manpower shortages have not fully gone away, according to the company.11

Seasonal hiring data shows how big the gap is. Logistics firms expected shipment volumes to rise by up to 20% this festive season, with temporary hiring up as much as 60%. DTDC reported that seasonal wages and incentives had risen 18-20% in metro markets and 10-12% elsewhere compared with last year.18 Blue Dart expected front-end staffing to run 30-50% above normal levels, with B2C volumes roughly doubling during peak weeks.18 Amazon said it had created more than 160,000 seasonal jobs and added 20 fulfilment centres ahead of the festivals.18

Attrition makes the problem worse. Seasonal turnover among frontline warehouse and delivery staff is running at 35-40%, and companies have raised festive incentive budgets by 15-20%. Many have moved from flat bonuses to rewards tied to attendance milestones.15 Some firms have raised hourly pay for delivery and packing roles from ₹110 to ₹150 during peak periods.15 Higher volumes, more workers and much higher pay per worker all add up to a cost structure that freight rates alone do not capture.

Fuel makes it worse, at home and abroad

Labour explains the Indian rate hikes, but fuel explains why the pressure is global. Brent crude has been above $100 a barrel amid US-Iran tensions and disruption around the Strait of Hormuz. Analysts say higher diesel prices are feeding into freight, warehousing and distribution costs for consumer companies.26 India's auto industry is dealing with rising steel, aluminium, CNG and freight costs, and executives have said more vehicle price increases may follow the festive season.21 Consumer durables makers face freight costs that have more than doubled and shipment delays of more than 15 days. Retailers say inventories are sufficient until Diwali, but any shortfall or price increase will arrive once the season ends.

Road freight within India remains strong. Truck rental rates on the Delhi-Kolkata corridor were 13% higher than a year earlier in September, supported by festive and infrastructure demand.25 Fuel, maintenance and tyre costs still threaten operators' margins.25

The US data shows clearly where this can lead. The TD Cowen/AFS Freight Index projects record ground and express parcel rates for the fourth quarter, which would make 2026 the most expensive year for parcel shipping on record.14 Less-than-truckload rates are forecast at 82.5% above their January 2018 baseline, an 8.8% rise year on year. Truckload rates are expected at their highest level since early 2022.13 US diesel averaged $6.382 a gallon in September, according to figures cited from the Energy Information Administration. That is $2.63 more than a year earlier.17

The most revealing finding concerns fuel surcharges. AFS calculates that 72% of the 22.25-point rise in the parcel fuel surcharge between early 2021 and September 2026 came from carriers changing their surcharge tables, not from pump prices. Even if diesel fell back to 2021 levels, the surcharge would still be about three times higher than it was then.16 An AFS executive described the surcharge as a revenue lever as well as a way of passing on costs.14 Indian sellers should take note. Once a surcharge is in place it tends to stay, and Delhivery has said it is building dynamic pricing indexed to network utilisation.28

Container rates: one index, two very different markets

Ocean freight data is the most mixed part of the picture. On headline figures, container shipping is much more expensive. Drewry's World Container Index stood at $4,434 per 40ft container on 1 October, about 166% higher than a year earlier on one calculation.1 Another analysis put the rise at about 154%.10 The index then rose 3% to $4,485 on 15 October.4

The composite figure hides a sharp split between routes. Asia-Europe rates fell for 13 consecutive weeks to 8 October as ships returned to the shorter Suez route. Shanghai-Genoa dropped 43% from its July level.2 Suez transits in week 39 were 68% higher than a year earlier.5 Transpacific rates moved the other way. Shanghai-New York rose from $7,904 in July to $10,220 by 8 October, driven by fuel costs, congestion and Panama Canal draft restrictions.2 Xeneta reported that Far East-to-US spot rates were still up more than 330% from their level before the Hormuz crisis began in late February.6

Forecasters disagree on what comes next. Xeneta's chief analyst believes US-bound rates have peaked for 2026. He expects East Coast rates to fall to around $6,000-7,000 within three months, a correction but not a collapse.6 Carriers are trying to push Asia-Europe rates back up, with higher FAK rates of $4,500-4,800 from 19 October. Drewry questions whether these will hold given the extra capacity, and expects rates to stay broadly stable.4 Intra-Asia rates hit a record for the sixth week in a row because of typhoons, port congestion and blank sailings.5 For Indian importers, this suggests that relief on Europe-bound routes will not translate into cheaper shipping everywhere.

Who pays, and how

For Indian e-commerce, the important question is who ends up carrying these costs. Logistics typically makes up 10-20% of an e-commerce business's expenses, and more for brands with low order values. Analysts say there is little room left to absorb further increases.11 They expect responses to vary. Some brands will cut discounts, others will add delivery fees or raise minimum order values. Outright price increases will be hardest in apparel and electronics, where shoppers can easily compare prices.11

The sellers quoted are waiting until after the festivals. One fashion seller on Flipkart and Myntra plans to raise mid-range prices by 7-10% from January rather than risk hurting festive demand.11 Consumer durables manufacturers are planning post-Diwali increases of 8-10%. Investor-focused coverage expects e-commerce companies to move away from aggressive discounting toward more conservative delivery models.12

Shiprocket points to a less visible cost: deliveries that fail. Reverse logistics costs ₹40-60 per shipment and repackaging adds ₹15-25. The company estimates the effective cost of a successfully delivered order at ₹85-110, and says Indian D2C brands lose over ₹8,000 crore a year to return-to-origin shipments.11 That changes the question for sellers. The rate per parcel matters less than the cost of each order that actually reaches a customer, which depends on delivery reliability, accurate addresses and fewer impulse cash-on-delivery orders.

The reading

The coverage does not fully agree. Delhivery's base rates held steady through last year's record festive peak without broad increases.28 Australian firms are building inventory buffers while holding back on expansion, because Christmas trading looks weak and warehousing and freight costs keep rising.20 In the US, rising freight rates are coming from shrinking capacity, not strong demand. Sixteen trucking companies filed for bankruptcy within 30 days.

The consistent thread is that this is a cost shock, not a demand boom. Labour shortages, wage revisions, fuel prices and surcharges that are hard to unwind are pushing logistics prices higher regardless of order volumes. In India, festive demand is giving carriers the opportunity to reprice, and January is when consumers will start to feel it. Brands that treat the January hikes as a temporary seasonal effect are likely to be caught out.