FedEx 2019 Peak Season Surcharges Penalize “Unstandard” Shipments
Small parcel shippers might be surprised to learn that FedEx has announced there will be no additional residential surcharges during the upcoming holiday season for standard-sized packages. The parcel carrier will, however, apply surcharges on shipments that are oversized or require additional handling.
This mirrors UPS’s own 2019 Peak Season announcement in that both companies are choosing to charge more for packages that are the most difficult (and costly for them) to transport.
According to the FedEx website, the details for the surcharges are as follows:
As the chart shows, the Peak Season surcharges begin well before the holiday season officially begins (as early as October 21) and end after the New Year (as late as January 5). This is no doubt in order to take advantage of some early holiday returns. Of note is that FedEx’s Peak Season surcharges will take effect three weeks later than when UPS’s are implemented.
The fees for Additional Handling, Oversize, and Over Max/Unauthorized will increase sharply during this period. The chart below compares Peak Season surcharges for both FedEx and UPS over the past three peak seasons (from 2017 to 2019):
Ecommerce shippers in particular will be adversely affected by several of the announced increases, such as Additional Handling, which is increasing 28.1% from 2018 (from $3.20 to $4.10). Also noteworthy is the Oversize package fee, which is going up $10.00, from $27.50 to $37.50 compared to last year. Over Max/Unauthorized Ground will see the largest increase of $285.00, which is an increase of 190%!
Comparing the two major carriers, the FedEx 2019 peak season surcharges are higher than UPS’s across the board. However, taking into account that the UPS Over Max and Oversize surcharges begin a full three weeks earlier (Oct. 1) than those of FedEx, some shippers might find that over the long run FedEx works out cheaper or that it’s a wash.
The following chart illustrates the differences:
The Bottom Line:
While many FedEx shippers sending primarily standard-sized and -shaped packages will enjoy this holiday season thanks to no additional surcharges, any companies sending shipments requiring “extra” from the carrier will experience a substantial impact to their costs from the carrier’s seasonal fees.