FedEx Adds Peak Fees on Shipments During Holiday Season -- Update
18 Août 2020 - 9:49PM
Dow Jones News
By Paul Ziobro
FedEx Corp. is adding extra fees on shipments during the
holidays, joining United Parcel Service Inc. and the U.S. Postal
Service in implementing surcharges to offset costs and control
shipping volumes during what is expected to be a busy online
shopping season.
FedEx says the surcharges are designed to primarily hit larger
customers. They include fees as much as $2 on all packages shipped
in the week after Thanksgiving for FedEx's lower-priced SmartPost
service, which is overwhelmingly used by large retailers. FedEx
will also charge as much as $5 a package on its premium Express
service for large shippers whose volume far exceeds normal
levels.
The company says the fees, which are both higher and broader
than previous years, are needed to help maintain service during its
busiest time of the year. The changes were noted on FedEx's
website.
"We are entering this holiday peak season with extremely high
demand for capacity while also experiencing increased operating
costs across our network," the company said. "We anticipate
residential volume to continue to surge into the new year."
Both UPS and the Postal Service have disclosed their own price
increases for the peak shipping season, which is forecast to be
challenging, with shoppers expected to avoid crowded stores over
fears of the coronavirus. That will push more of the holiday
shopping online. The carriers are aiming to prevent their networks
from being overwhelmed, while also capitalizing on newfound pricing
power in the market.
Higher prices from all three companies will challenge retailers
who have relied on e-commerce to sustain sales this year. They can
either charge consumers higher fees for shipping, raise prices or
eat the costs. Retailers may also rely more on their stores to get
online orders to shoppers, by encouraging pickup of orders or
having them shipped to the stores, since the surcharges primarily
apply to residential shipments.
FedEx's fees start as early as Oct. 5 and run through
mid-January. The earlier fees are on large packages and those that
require additional handling.
The surcharges on SmartPost will run $1 on all those shipments
starting Nov. 2, and rise to $2 a package during Cyber Week,
typically one of the busiest shipping weeks as it follows Black
Friday sales.
While SmartPost has historically used the post office for
deliveries to homes, FedEx is increasingly keeping those packages
in its ground network. The company is looking to have more packages
on residential routes after cutting ties with Amazon.com Inc. last
year.
Another set of surcharges applies to customers who ship out more
than 35,000 packages a week. The fees range from $1 to $5 a
package, based on how high the customer's weekly shipping volume
is, compared with before the pandemic caused a rise in shipping
levels.
Write to Paul Ziobro at Paul.Ziobro@wsj.com
(END) Dow Jones Newswires
August 18, 2020 15:34 ET (19:34 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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