FedEx Announces Peak Surcharge Increases for the Holiday Season
FedEx will increase various surcharges for peak season, focused on Express and Ground home delivery services, reports Business Insider. Starting in October, FedEx will raise its surcharges for packages that require additional handling, are oversized, or are unauthorized for its Ground network from $3.50 to $5.95 and $30 to $62.50 through Jan. 16, 2022. FedEx will also implement per-package surcharges for Ground Economy shipments, starting at $1.50 on Nov. 1 and peaking at $3.00 from Nov. 29 to Dec. 12, among other charges. FedEx said on its website the surcharges are necessary to keep service levels high.
Total Retail's Take: FedEx's increase is in line with its rival UPS, as the shipping carrier expects "continued high demand for capacity and increased operating costs" across its network. As the COVID-19 pandemic continues, its staggering impact on supply chains hasn't let up. FedEx only recently increased surcharges in June as the virus continues to generate elevated volumes, high demand for capacity, and increased operating costs across its carrier network.
The new delivery surcharges could add extra pressure to merchants and retailers' operating costs because businesses must either absorb the increases or pass them on to their customers. Supply chains will be strained as consumers order massive amounts of goods online and both retailers and carriers struggle with a labor shortage to keep up. With one COVID-marred holiday season under their belts, retailers may have an idea of what's to come for this season and hopefully are more prepared to weather the shipment storm. Bottom line is they will be paying more to do so.
Kristina Stidham is the digital content director at Women in Retail Leadership Circle and sister brand Total Retail. She is passionate about digital media and handles video, podcast and virtual event production for both brands. You can often find her at WIRLC, TR, or industry events with her camera and podcasting equipment recording interviews with retailers.
Kristina holds a B.A. in Media Studies and Production from the Temple University Klein College of Media and Communication in Philadelphia. Go Owls! When she's not in the office, she loves to go on long walks, sing around the house, hangout with her two pet guinea pigs, and travel to new places.