FedEx Follows UPS in Adding Additional Domestic Delivery Surcharges

August 14, 2020
  

Quick Takeaways

  • FedEx® added multiple Peak Surcharges to be applied as of June 8th, following UPS's example in late May 2020.
  • FedEx's additional surcharges apply to their SmartPost®, oversized, and domestic residential packages.
  • UPS’s additional surcharges apply to their Ground Residential, SurePost®, and large packages.
  • Surcharges are in response to the high level of residential deliveries due to a spurred increase of online ordering during the COVID-19 lockdown.
  • At this point, the surcharges are in effect until further notice.

Despite initially adding surcharges only to International and TNT shipments, FedEx® announced in early June 2020 saying that they would be adding additional temporary and peak surcharges to residential and large packages shipments. Effective on June 8, 2020; the surcharges would apply to: FedEx SmartPost®, “oversized” large, and domestic residential packages.

Their reasoning, from their Shipping Rates - Surcharges and Fees page, states:

“FedEx is an essential business keeping commerce moving and delivering critical shipments to homes during the COVID-19 crisis. As the impact of the virus continues to generate a surge in residential deliveries and has also generated a surge in oversize, hard-to-handle packages, we have experienced increased operating costs across our network.”

It seems that with more people ordering online directly from the company due to the pandemic and business closures, shipping companies like FedEx® are getting stung from the increase in residential deliveries. However, this strain seems to be felt across the shipping industry as this announcement comes hot on the tails of a similar one that competitor UPS® made only a week earlier.

Back in late May 2020, UPS® announced that they also would be adding additional surcharges to domestic shipments due to the surge of deliveries in recent months. This is a first for the delivery company and was made effective on May 31, 2020, again only a week before FedEx’s surcharge announcement.

Surcharge Breakdown

As far as we know, here is the full breakdown of the surcharges being added by both FedEx® and UPS®.

FedEx®

Surcharge Name Surcharge Service Level Surcharge Type Surcharge Amount Effective Date
Temporary Surcharge FedEx SmartPost® Temporary $0.40 per package June 8, 2020 until further notice
Peak - Oversize Charge Oversize1 U.S. domestic FedEx Express® and FedEx Ground® Peak $30.00 per package June 8, 2020 until further notice
Peak - Residential Delivery Charge U.S. domestic residential FedEx Express® and FedEx Ground® Peak $0.30 per package June 8, 2020 until further notice

1 According to the FedEx® Peak Surcharges page, an oversized package is "any package that exceeds 96 inches in length or 130 inches in length and girth."

UPS®

Surcharge Service Level Surcharge Amount Effective Date
UPS® Ground Residential $0.30 per package May 31, 2020 until further notice
UPS® SurePost $0.30 per package May 31, 2020 until further notice
All Service Levels (Large2 Packages) $31.45 per package May 31, 2020 until further notice

2 According to the UPS®, a large package is one where the length plus girth exceeds 130 inches or with a length that exceeds 96 inches.

 

What Does This Mean for Your Business?

1. Keeping an Eye on your Dimensional Weight Pricing
With both weight and size affecting your pricing, it's important to keep your DIM weight low by using the smallest, lightest packaging possible when you ship out packages. If you're curious on how to calculate your DIM Weight or any other dimensional weight resources, you can check out our DIM Weight Calculator & Resource Center.

2. Make Sure You're Finding the Best Rate
Remaining loyal to a carrier is easy, but having to suffer their higher rates is hard. By using rate shopping software like NeoShip, you can compare the rates from the 3 major carriers to ensure you're always shipping packages and parcels out at the lowest rates...all in one place!

If you have any questions, be sure to write them below in the comments. To make sure you don’t miss out on any other news, move up Quadient from standard to priority email by putting us in your primary tab. And if you’d like to get more information about the surcharge updates from FedEx® and UPS®, check out our Resources below!

 

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