Another legal fight over tariffs is brewing — this time, over the fees shipping services such as FedEx and UPS charge to handle the duties.
After the Supreme Court ruled many of President Donald Trump’s tariffs unconstitutional last month, some companies sued the federal government seeking refunds. Some, like FedEx, said publicly that they would pass along any tariff refunds that they get to businesses and consumers who ultimately paid them.
The tariffs themselves aren’t the only charges customers got stuck with, though. Shipping services, including FedEx and UPS, also tacked on brokerage fees and other charges to the tariff bills they sent customers.
A half-dozen recent lawsuits filed by customers against shipping companies are seeking refunds for those fees, too.
The lawsuits argue that the shipping companies never should have charged the fees in the first place, and that the shippers, not the government, owe the customers. In some cases, the fees totaled as much as the cost of the tariffs themselves.
The shippers “made the decision to assess that additional fee,” John Yanchunis, an attorney at Morgan & Morgan, a firm that filed a lawsuit against FedEx over tariffs and brokerage fees, told Business Insider.
The plaintiff in Yanchunis’ lawsuit, a South Florida resident who ordered a pair of tennis shoes from Germany with a declared value of $140, received a $36 bill from FedEx. The bill included $21 in now-unconstitutional tariffs and $15 in “FedEx’s customs brokerage and duty advancement fees,” according to the complaint.
Yanchunis said that his case aims to get compensation independent of FedEx’s lawsuit over the tariffs themselves. “Why should consumers have to wait for Federal Express or any other company to battle it out with the government?” he said.
At least five similar lawsuits, most seeking class-action status, have been filed against either FedEx or UPS since the Supreme Court’s ruling last month.
A FedEx spokesperson did not comment on whether the company plans to refund brokerage fees for shipments subject to the tariffs. The spokesperson pointed to a February statement in which the company said, “if refunds are issued to FedEx, we will issue refunds to the shippers and consumers who originally bore those charges,” though it did not mention related fees.
A UPS spokesperson did not respond to a request for comment.
FedEx and UPS could face questions about costs in court
For average consumers, the fees became apparent this past summer when Trump ended the de minimis loophole, which had allowed shipments valued at less than $800 to enter the US duty-free. Consumers began receiving tariff bills from UPS and FedEx for international shipments containing everything from wine from Italy to camera lenses from Japan.
Some customers told Business Insider that UPS also charged them late fees and threatened to send their bills to collections as they attempted to correct errors, such as incorrect tariff rates.
Some of the lawsuits against FedEx and UPS argue that, like the tariffs themselves, the companies never had standing to collect the brokerage fees.
“Even if FedEx refunds the void duties, the brokerage fees remain unlawful charges for which there was no lawful basis,” the complaint in Yanchunis’ lawsuit reads.
While the US government has collected $133 billion in IEEPA tariffs — those that were ruled unconstitutional — it’s not clear how much shipping services such as FedEx and UPS have collected in fees.
UPS said in its annual report filed earlier this year that, despite having to adjust to the tariffs, the company “achieved revenue growth of 3.4%” in its supply chain solutions business, “driven, in part, by brokerage results.” Its brokerage business also contributed to the company’s operating profit, according to the report.
Deciding how much of the brokerage fees companies like FedEx and UPS might have to pay back would be tricky, said Adam Hanover, managing director of restructuring and dispute resolution at advisory firm CohnReznick.
Courts handling the lawsuits might have to decide how much of the brokerage fees were the companies’ actual costs and how much they took as profit, Hanover said. FedEx and UPS pay their own in-house brokerage teams, which handle many of the tariffed shipments, for example.
FedEx cited “customs-related brokerage fees due to the removal of the de minimis exemption” as a factor that increased its operating expenses in recent quarters, according to the company’s quarterly filing.
“You can really go down a rabbit hole on this one,” he said.
Patrick Penfield, professor of supply chain practice at Syracuse University’s Whitman School of Management, said that FedEx’s $15 charge on the shoes in Yanchunis’ case seems “somewhat excessive” for such a low-value consumer good. FedEx says it charges either $15 or 2% of an item’s value, whichever is greater, for shipments valued at less than $800.
The lawsuits are likely to determine whether those fees actually were excessive — and how much consumers could get back.
“FedEx is entitled to some money, but I think it was a little bit too much money,” Penfield said.
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