A pair of brown and purple shipping giants are facing a legal problem that no amount of logistics optimization can solve. FedEx and UPS, the two dominant forces in American package delivery, are now defendants in a growing wave of lawsuits from customers who say they were blindsided by customs brokerage fees tied to international shipments — charges that in many cases dwarf the value of the goods themselves.
The complaints share a common thread. A consumer orders something from abroad, often from a retailer in Canada, the UK, or Asia. The package arrives. Then, days or weeks later, an invoice appears — sometimes for hundreds of dollars — from the carrier’s brokerage arm, demanding payment for customs clearance services the recipient never explicitly requested.
As Business Insider reported, the surge in these complaints has accelerated sharply since early 2025, coinciding with the reimposition and escalation of tariffs under the current administration’s trade policy. President Trump’s aggressive tariff regime — including duties on Chinese goods that have climbed as high as 145% in some categories, and new baseline tariffs of 10% or more on imports from dozens of countries — has dramatically increased the dollar amounts attached to customs processing. And with those higher duty amounts have come proportionally larger brokerage fees, because carriers often calculate their service charges as a percentage of the duties owed or the declared value of the shipment.
That’s the mechanism. Here’s the friction.
Most consumers who order goods online from international sellers don’t realize that when FedEx or UPS carries their package across a border, the carrier automatically acts as the customs broker — filing the necessary paperwork with U.S. Customs and Border Protection, calculating the duties owed, and advancing payment to the government on the recipient’s behalf. The carrier then bills the recipient for the duties plus a brokerage fee for handling the paperwork. Consumers rarely see this coming. The fees aren’t disclosed at checkout by the retailer. They aren’t prominently advertised by the carriers. And they often arrive as a surprise invoice after the package has already been delivered.
The lawsuits allege that this practice amounts to an unfair and deceptive business practice under various state consumer protection statutes. Plaintiffs argue that they never agreed to use FedEx or UPS as their customs broker, that the fees are unreasonable relative to the work performed, and that the carriers exploit their position as the default broker to extract inflated charges from consumers who have no practical ability to choose a different broker or refuse the service.
One plaintiff in a proposed class action filed in federal court in Illinois described receiving a $187 brokerage fee on a $40 pair of shoes shipped from the United Kingdom. Another, in a case filed in California, was billed $312 in combined duties and brokerage charges on a $95 electronics accessory from Shenzhen. The pattern repeats across dozens of complaints: small-value consumer goods, large unexpected bills.
FedEx and UPS have both declined to comment in detail on pending litigation. But both companies have previously defended their brokerage practices as standard industry procedure, noting that customs brokerage is a regulated activity and that their fee schedules are publicly available on their websites. UPS’s published brokerage fee schedule, for instance, lists a “brokerage entry preparation” charge that starts at around $10 for low-value informal entries but can climb to $100 or more for formal entries requiring detailed customs documentation. FedEx’s schedule is similar. Both carriers also charge ancillary fees for duties advancement, bond fees, and regulatory processing.
The carriers aren’t wrong that their fee schedules are technically public. But critics say “technically public” and “practically known” are two very different things. A consumer buying a $30 item from an overseas Etsy seller is unlikely to consult a carrier’s customs brokerage tariff before clicking “buy.” And the seller, who chose the carrier, has little incentive to highlight the potential downstream costs to the buyer.
This disconnect has existed for years. What’s changed is scale.
The tariff escalation that began in early 2025 has functioned as an accelerant. When duties on a given product category jump from 2.5% to 25% — or in the case of many Chinese goods, far higher — the absolute dollar amount of the brokerage fee often rises in tandem. A brokerage charge that might have been $12 on a low-duty item can balloon to $50 or $80 when the underlying tariff rate quadruples. For consumers accustomed to frictionless cross-border e-commerce, the sticker shock has been severe.
The problem is compounded by the elimination of the de minimis exemption for Chinese goods. Until recently, shipments valued under $800 entered the United States duty-free under the so-called Section 321 de minimis provision. That exemption was the backbone of the business model for platforms like Temu and Shein, which shipped millions of low-value packages directly from Chinese warehouses to American doorsteps without triggering any customs duties or brokerage fees. When the administration closed the de minimis loophole for Chinese-origin goods in early 2025, every one of those packages suddenly became subject to duties — and, by extension, to brokerage fees from whichever carrier handled the last mile of delivery.
The volume is staggering. According to data from U.S. Customs and Border Protection, more than 4 million packages per day entered the U.S. under the de minimis provision at its peak. Even a fraction of those shipments now generating brokerage invoices represents an enormous new revenue stream for FedEx and UPS — and an enormous new source of consumer complaints.
Social media has amplified the backlash. On X, the platform formerly known as Twitter, posts from consumers sharing screenshots of brokerage invoices have gone viral repeatedly in recent months. “Just got a $94 FedEx brokerage fee on a $22 candle from Canada,” read one widely shared post. “How is this legal?” Another user posted a UPS invoice showing $156 in fees on a birthday gift shipped from London. The replies are filled with similar stories and, increasingly, with links to the class action lawsuits and invitations to join them.
Consumer advocacy groups have taken notice. The National Consumer Law Center published a brief in February 2025 arguing that the current brokerage fee model is “structurally unfair” because it imposes costs on recipients who had no role in selecting the carrier or the brokerage service. The brief called on the Federal Trade Commission to investigate whether the practice violates Section 5 of the FTC Act, which prohibits unfair or deceptive acts or practices in commerce.
The FTC has not publicly indicated whether it intends to act. But the agency has been active on adjacent fronts, including its ongoing crackdown on “junk fees” across multiple industries. Brokerage charges that arrive after a transaction is complete, with no prior disclosure to the party being billed, fit neatly within the agency’s stated definition of junk fees — charges that are hidden, unexpected, or that consumers cannot reasonably avoid.
For FedEx and UPS, the financial stakes are significant but not existential. Customs brokerage is a profitable ancillary business for both companies, but it represents a small fraction of their overall revenue. FedEx reported $87.7 billion in total revenue for fiscal year 2024. UPS reported $91 billion. Brokerage fees, while not broken out as a separate line item, are estimated by industry analysts to generate low single-digit billions in combined revenue for the two carriers. The reputational risk, however, may be more consequential than the direct financial exposure.
Both companies have spent decades and billions of dollars building consumer brands synonymous with reliability and trust. FedEx’s iconic “When it absolutely, positively has to be there overnight” campaign is one of the most recognized slogans in American advertising history. UPS’s “What can Brown do for you?” branding positioned the company as a helpful, customer-centric partner. Surprise invoices for hundreds of dollars don’t fit that narrative.
And the timing is particularly awkward. Both carriers are in the middle of strategic pivots that depend heavily on consumer goodwill. FedEx is executing a massive restructuring under its DRIVE initiative, consolidating its operating companies into a single entity to cut costs and improve margins. UPS, under CEO Carol Tomé, has been aggressively pursuing a “better, not bigger” strategy focused on higher-margin shipments and premium services. Neither company wants a consumer backlash muddying its story with investors.
The legal arguments in the pending cases will likely turn on a few key questions. First, whether the carriers’ terms of service — which recipients typically never see or agree to — constitute a valid contract that authorizes the brokerage charges. Second, whether the fees are “reasonable” under applicable state consumer protection laws and federal customs regulations. And third, whether the carriers have a duty to disclose the potential for brokerage fees before delivering the package, rather than after.
Courts have been mixed on these questions in prior cases. A 2019 Canadian court ruling found that UPS’s brokerage fees were not adequately disclosed and ordered refunds to a class of Canadian consumers. But U.S. courts have generally been more deferential to carriers’ terms of service, and the regulatory framework for customs brokerage in the United States gives licensed brokers considerable latitude in setting their fees.
The plaintiffs’ attorneys in the current wave of cases are betting that the sheer volume of complaints and the extreme ratio of fees to goods value will move the needle. “When a company charges someone $187 to process customs paperwork on a $40 pair of shoes, that’s not a reasonable fee — that’s a toll booth,” said one plaintiffs’ attorney quoted by Business Insider.
There’s a broader industry dimension to this story that extends well beyond FedEx and UPS. The tariff-driven disruption of cross-border e-commerce is forcing a reckoning across the entire supply chain. Retailers, marketplaces, and logistics providers are all scrambling to figure out who bears the cost of compliance — and who bears the blame when consumers get hit with unexpected charges.
Amazon, which handles a significant share of cross-border consumer shipments through its marketplace, has begun displaying estimated import fees at checkout for many international orders, collecting those fees upfront and handling customs clearance through its own brokerage operations. This approach largely shields consumers from surprise invoices, though it also means the sticker price at checkout is higher. Shopify, which powers hundreds of thousands of independent online stores, has rolled out tools to help merchants calculate and display duties at checkout, but adoption has been uneven.
Smaller carriers and freight forwarders are also feeling the heat. DHL, which handles a large volume of international small-parcel shipments, has faced similar complaints about brokerage fees, though its exposure in the U.S. consumer market is smaller than that of FedEx or UPS. Regional carriers and postal services, including the U.S. Postal Service, typically don’t charge brokerage fees on low-value shipments processed through the mail stream, which has led some consumers to actively seek out sellers who ship via postal channels rather than private carriers.
The irony is thick. A tariff policy designed in part to encourage domestic purchasing is instead generating a new category of consumer grievance directed not at foreign sellers but at American shipping companies. The carriers didn’t set the tariff rates. They didn’t choose to be the default customs brokers. But they’re the ones sending the invoices, and in the consumer’s mind, that makes them the villain.
Some industry observers see a legislative fix as inevitable. Representative Suzan DelBene of Washington state introduced a bill in March 2025 that would require carriers to provide clear, upfront disclosure of potential brokerage fees before delivering international shipments, and would cap brokerage fees at a flat dollar amount rather than allowing percentage-based pricing. The bill has bipartisan co-sponsors but faces an uncertain path in a Congress preoccupied with larger trade policy battles.
In the meantime, the lawsuits will grind forward. Discovery in the Illinois case is expected to begin later this year, and plaintiffs’ attorneys have signaled their intent to seek class certification covering all U.S. consumers who received brokerage invoices from FedEx or UPS above a certain threshold relative to the value of the goods shipped. If certified, the class could number in the millions.
FedEx and UPS will almost certainly fight certification aggressively, arguing that each customer’s situation is too individualized for class treatment. They’ll point to variations in the type of goods shipped, the tariff rates applicable to different product categories, the specific brokerage services performed, and the terms of service governing each shipment. These are strong arguments in the abstract. But judges tend to be sympathetic to consumers when the core allegation is simple: I got a bill I didn’t expect, for a service I didn’t ask for, in an amount I couldn’t have predicted.
The outcome matters beyond the courtroom. If the carriers lose or settle on terms that require fundamental changes to their brokerage fee practices — upfront disclosure, fee caps, opt-in consent — the ripple effects will reshape how cross-border e-commerce works in the United States. Retailers will need to integrate duty and fee estimation into their checkout flows. Carriers will need to build new consumer-facing disclosure systems. And consumers will, for the first time, see the true landed cost of their international purchases before they click “buy.”
That might be the most consequential outcome of all. Not a legal precedent, but a commercial one. Transparency.
For decades, the friction costs of international trade were hidden from consumers by a combination of low tariff rates, the de minimis exemption, and the sheer efficiency of modern logistics. Packages moved across borders so smoothly that most people forgot borders existed. The tariff shock of 2025 has shattered that illusion. And the brokerage fee lawsuits are the sound of consumers discovering, for the first time, what it actually costs to move a $40 pair of shoes from one country to another.
FedEx and UPS didn’t create this problem. But they’re standing in the blast radius. And the legal bills are just starting to arrive.
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