New FedEx surcharges are rolling out... again.
First, some backstory. At the beginning of the year, FedEx announced that they were implementing peak season surcharges. And in June, they announced increases to those surcharges.
What FedEx Surcharges Are Going Up Now?
FedEx is increasing the peak surcharges on things like the residential surcharge for high-volume residential shippers. They’re also upping some of the size and weight-related surcharges that are already in place, specifically for additional handling and oversized packages.
This is something that shippers absolutely need to know about. If you don't have a partner like Lojistic, it’s important to figure out what the actual impact is before it happens. You need to determine if you need to change anything related to customer billing, if you’re just going eat the cost, or if you want to try to negotiate with the carrier and see if there's anything that FedEx will do.
Will UPS Follow Suit?
FedEx has already made an announcement about increases, but we expect UPS to follow suit.
The only possible reason that UPS might not is that they've had record profits again. Last year they had something like $86 billion in revenue and they're expecting to cross the $100 million by 2023.
Some of the changes they’ve made over the last year to accommodate additional volume are absolutely paying off. And that includes some of the peak surcharges that they've already implemented. That said, we do expect some sort of announcement.
Last year was obviously atypical for a number of reasons, especially when it comes to parcel shipping. But the timing of the surcharge increase this year is atypical as well.
It's rare that FedEx surcharges come out in the middle of the year. It’s not surprising either, however. They're probably announcing it now because they want to announce one more before the fourth quarter, which is their typical holiday peak season.
In other words, FedEx will probably announce one more increase to those peak season surcharges, and if UPS doesn’t announce an increase soon, they probably will before Q4 too.
The Biggest Impact That FedEx Surcharges Will Have on Shippers
Now that FedEx has increased almost all of their surcharges, the one that jumps out for shippers is for additional handling.
If you're a high-volume shipper who’s been hit hard by residential fees, the increase is significant. Additional handling has basically doubled in cost.
The oversize peak surcharges are also notable. If you have heavy packages or large packages that are considered oversized, or you’ve been getting hit with additional handling fees, you’ll definitely want to keep an eye on those.
Author
Rich Harkey
Rich Harkey
Senior Strategy Manager
Rich Harkey is a results-driven professional with extensive experience in the logistics and supply chain industry.
As the Senior Strategy Manager at Lojistic, Rich leverages over three decades of expertise to help businesses improve their shipping strategies and reduce costs. With a deep understanding of the requirements of shippers and the operational intricacies of carriers, he excels in everything from optimizing business rules and managing carrier invoices to negotiating carrier contracts.
Rich's comprehensive knowledge of the logistics industry, combined with his strategic insights and passion for data analysis, has enabled thousands of companies to gain visibility into their shipping expenses, driving impactful results.