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FedEx to Eliminate Holiday Surcharges for Most Orders

In a recent statement, FedEx mentioned that it would not charge additional fees for most orders during the 2017 holiday season – undercutting rival UPS as they battle for e-commerce customers.

The decision is based on the idea that FedEx can cover the additional costs due to high holiday volumes, as shipment volumes can potentially double to more than 26 million packages per day. FedEx will charge additional fees for deliveries requiring further handling including irregularly shaped and oversized packages, which now make up 10% of the company’s ground-shipping volume.

FedEx has chosen to focus its efforts on the largest packages, with additional fees in effect from Nov. 20 through Dec. 24. These fees include a $25 surcharge on oversize packages (which are currently hit with a $72.50 charge to ship) and a substantial $300 surcharge for “unauthorized packages” – or, packages that exceed the maximum size allowed but are delivered at FedEx’s discretion.

In contrast, UPS has a considerably different pricing structure for the upcoming holiday season. In June, UPS stated that it would charge additional fees for home delivery packages on and around Black Friday and Christmas. New per-package fees will range from 27 cents to 97 cents – potentially producing tens of millions in revenue from this increase in fees alone.

UPS’s surcharges will also include additional fees on oversize packages delivered from Nov. 19 through Dec. 23 to shift large parcels to the company’s freight network and free up space during the holiday season. UPS has said that it expects most of its customers will agree to the surcharges.

Research firm eMarketer Inc. predicts that online sales will increase 17% this holiday season to $107 billion, outperforming the expected 3.1% growth in overall retail sales during the same time. This has driven both FedEx and UPS to invest heavily in its technology and processes to accommodate the anticipated increase in e-commerce orders.

Is your e-Commerce business prepared for the upcoming holiday season? If not, the IA team can help! Our expert account managers can help you create a strategy to figure out the optimal shipping days and avoid unnecessary fees and costs. Contact us today at info@intelligentaudit.com or (201) 880-1110 for more information.