The News
Amazon is fighting freight inflation with seller surcharges, shorter shipping distances and robots after its shipping bill rose 11% to $28.3 billion last quarter.
The number of units Amazon sold grew 12%, a little faster than its shipping costs.
Asked about fuel, CFO Brian Olsavsky said: “I don’t have an exact number for you, but it is higher in Q4 than it was in Q3.”
The details
Fuel and the long-haul trucking that moves freight between Amazon’s buildings account for about 3 points of that 11% rise. Olsavsky said the team “navigated higher transportation costs from fuel inflation and higher line haul rates.” Without that inflation, shipping costs grew 8%. Amazon’s shipping costs cover inbound and outbound freight, its sortation and delivery stations, and the deliveries Amazon makes itself.
Amazon has passed part of that fuel bill to sellers who use its warehouses since April. It added a 3.5% fuel and logistics surcharge to Fulfillment by Amazon fees in the US and Canada. The same surcharge applies to Buy with Prime and Multi-Channel Fulfillment orders. Olsavsky said it “recovers some, but not all of the costs.”
The surcharge works out to about 17 cents a unit for US FBA, depending on size. Amazon called it temporary and gave no end date.
Third-party sellers made up 61% of the units Amazon sold in the quarter. Its seller services revenue rose to $46.5 billion from $42.5 billion.
At the same time, Amazon kept spending to make deliveries faster and says its cost per unit is still falling. It delivered more than 1.5 billion items to Prime members same day or overnight in the quarter. CEO Andy Jassy said, “We’re on track to reduce cost to serve per unit for the fourth consecutive year.”
Olsavsky credited “better inventory placement, shorter shipping distances” for lowering the cost to serve in the quarter.
Fulfillment costs, the cost of running Amazon’s warehouses, rose 8% to $30 billion.
Amazon spent $75.9 billion on buildings and equipment in the quarter. Most went to technology infrastructure for its cloud business, and some to “additional capacity to support our fulfillment network.”
The faster network runs on more robots and a slightly bigger workforce. Jassy said Amazon now has more than 1 million robots in its fulfillment network. Olsavsky said it doubled its fleet of robotic arms, such as Cardinal and Sparrow, this year. Amazon employed 1,638,000 people at the end of September, up 4% from a year earlier.
“A lot of the jobs that we have that are more repetitive that we have humans doing will be done by robots,” Jassy said.
Amazon plans to hire more than 300,000 seasonal, part-time and full-time workers in the US this holiday season. It is also raising starting pay for full-time US operations workers to $20 an hour.
Worth noting
Amazon’s shipping costs have grown almost as fast as its units all year. In late 2025, shipping costs grew 2-3 points slower than units. In 2026, the gap shrank to about 1 point. In the second quarter, which held Prime Day, shipping costs grew faster: 19% against 17%.
What’s next
Holiday peak starts with Black Friday, Nov 27. Amazon’s filing says split shipments, free upgrades and long-zone deliveries raise its net shipping costs during the holiday season.
(Photo: Courtesy of Amazon)
