FedEx tacks on peak fees during holiday season

2018 Holiday Surcharges: FedEx vs UPS | Reveel

FedEx tacks on peak fees during holiday season

FedEx and UPS have announced holiday rate increases for the second year in a row, providing even more evidence that these peak season charges are here to stay.

Last year was the first year that the world’s largest carriers imposed surcharges on holiday shipping. The surcharges make sense for carriers: these are by far the busiest weeks of the year for FedEx and UPS.

Between Nov. 19 and Christmas Eve, FedEx says it handles more than 400 million packages. UPS says it moved 700 million packages during last year’s holiday season–that’s more than 1.1 billion packages shipped in the span of about six weeks.

In 2018, both carriers are sticking with their strategies from last year. UPS will charge for every package it moves between Thanksgiving and Christmas, while FedEx will only charge for large packages–those that currently carry Oversize, Additional Handling or Ground Unauthorized Package surcharges.

FedEx will charge $27.50 for Oversize Packages, $150 for Ground Unauthorized Packages and $3.20 for Additional Handling.

The United Parcel Service (UPS) uses slightly different names, but these categories look very similar to FedEx’s. UPS will charge $26.20 for Large Packages, $165 for packages Over Maximum Limits and $3.15 for Additional Handling (UPS did not have an Additional Handling surcharge during the holidays last year).

UPS will keep surcharges on all its package delivery services from Ground to Next Day Air, and increase all of them up by at least one cent.

Resource:Making Sense of Surcharges: 9 Accessorials You Need to Know (on-demand webinar)

FedEx Holiday Surcharges 2018

FedEx 2017 vs 2018 Holiday Surcharges
FedEx Peak SurchargeFedEx SurchargesAdditional FedEx Holiday SurchargeTotal FedEx Holiday Shipping CostsFedEx Holiday Surcharge Effective Dates
20172018201720182017% Increase2018
Oversize Charge$72.50$80$25 per package$27.50 per package$97.5010%$107.50November 19, 2018 – December 24, 2018
Ground Unauthorized Package Charge$115$675$300 per package$150 per package$265211%$825November 19, 2018 – December 24, 2018
Additional Handling Charge$11$20$3 per package$3.20 per package$1555%$23.20November 19, 2018 – December 24, 2018

FedEx is continuing its 2017 holiday strategy of charging only for the largest and oversized packages that already carry surcharges. FedEx is not adding any surcharges for residential deliveries. The company justified this move by explaining that it didn’t want to increase the shipping costs of moving small parcels, which still make up the majority of its business.

“FedEx delivers possibilities every day for millions of small- and medium-sized businesses,” said Raj Subramaniam, executive vice president, chief marketing and communications officer at FedEx Corp.

“We are demonstrating our support for these loyal customers during this critical time frame by not adding additional residential peak surcharges, except for situations where the shipments are oversized, unauthorized or necessitate additional handling.”

FedEx’s holiday rates take effect Nov. 19.

FedEx Holiday Oversize Package Surcharge

The Oversize Package Charge apply to packages that have lengths greater than 96 inches or length and girth combined measurements greater than 130 inches, shipped using either Ground or Express services.

During the rest of the year, these packages carry a fee of $80. During the holidays, that will rise to $107.50.

FedEx Holiday Ground Unauthorized Package Charge

Unauthorized packages are those that are outside the scope of what FedEx promises to deliver, meaning that they might be returned to the shipper. Whether or not they’re delivered, FedEx can charge for their handling.

These packages have lengths greater than 108 inches or combined length and girth measurements greater than 165 inches, or weights greater than 150 pounds.

A newly announced rate increase that will take effect Sept. 10, increases fees for these packages to $675 per parcel. With the holiday surcharge tacked on, moving packages this large will cost you $825–on top of weight-based charges.

FedEx Holiday Additional Handling Charge

Additional Handling charges are among the most common fees shippers encounter because they apply to a variety of packages: packages longer than 48 inches on their longest side, longer than 30 inches along their second-longest side or weighing more than 70 pounds. Products that are packaged in unusual ways may also carry additional handling surcharges.

In a rate increase due to take effect Sept. 3, FedEx will increase its Additional Handling charge to $12. During the holidays, it will rise to $39.50.

United Parcel Service Holiday Surcharges 2018

UPS Holiday Surcharges: 2017 vs 2018
UPS Peak SurchargeUPS SurchargesAdditional UPS Holiday SurchargeTotal UPS Holiday Shipping CostsUPS Holiday Surcharge Effective Dates
20172018201720182017% Increase2018
Large Packages$70$90$24 per package$26.20 per package$94.0024%$116.20November 18,2018 – December 22, 2018
Over Maximum Limits$150$650$249 per package$165 per package$399104%$815November 18,2018 – December 22, 2018
Additional Handling Packages$10.85$12 for packages less than 70 lbs$19 for packages greater than 70 lbsNo Surcharge$3.15 per package$10.8540% for packages less than 70 lbs104% for packages greater than 70 lbs$15.15 for packages less than 70 lbs$22.15 for packages greater than 70 lbsNovember 18,2018 – December 22, 2018

UPS also adds surcharges to its largest packages shipped during the holidays. But it also tacks very small surcharges (typically less than $1) onto all its shipments, spreading the costs of holiday shipping across the board.

UPS holiday surcharges take effect on Dec. 18–one day earlier than FedEx.

UPS Holiday Large Package Charge

UPS applies its Large Package surcharge to parcels whose length exceeds 96 inches or whose length plus girth exceeds 130 inches. This is on par with FedEx’s parameters.

For most of the year, these parcels carry a $90 surcharge (raised from $80 in July). During the holidays, it will rise to $116.20.

UPS Holiday Over Maximum Limits Surcharge

These are the packages that FedEx calls “unauthorized”  that weigh more than 150 pounds with length greater than 108 inches, or with length and girth exceeding 165 inches. In summer 2018, UPS hiked surcharges for these packages to $650. During the holidays, the fee will reach $815.

UPS Holiday Additional Handling Charge

During the rest of the year, UPS charges $19 to move packages that require additional handling and weigh more than 70 pounds. For packages weighing less than 70 pounds, the additional handling surcharge is $12.

With the addition of the holiday surcharge, requiring additional handling for a package weighing more than 70 pounds will cost $22.15.

UPS Per-Package Delivery Service Holiday Surcharges

UPS Per-Package Holiday Surcharges: 2017 vs 2018
UPS Service Surcharge2017 Holiday Surcharge2018 Holiday SurchargeEffective Dates
UPS Next Day Air Early$0.81 per package$0.84 per packageDecember 16, 2018 – December 22, 2018
UPS Next Day Air
UPS Next Day Air Saver
UPS 2nd Day Air A.M.$0.97 per package$0.99 per packageDecember 16, 2018 – December 22, 2018
UPS 2nd Day Air
UPS 3 Day Select
UPS Ground$0.27 per package$0.28 per packageNovember 18,2018 – December 1, 2018
UPS Ground with Freight PricingDecember 16, 2018 – December 22, 2018
UPS Next Day Air Early$2.99 per package$3.14 per packageNovember 18,2018 – December 1, 2018December 16, 2018 – December 22, 2018
UPS Next Day Air
UPS 2nd Day Air
UPS Ground

UPS also adds small fees to packages that do not carry any of these surcharges. These range from $0.28 for parcels shipped on UPS Ground services to $0.99 for 2nd Day Air, and 3 Day Select services.

However, note that these surcharges do not apply for the entire holiday season. Some kick in between Nov. 18 and Dec. 1 covering Thanksgiving, then vanish for a few weeks. Others only run from Dec. 16 to Dec. 22.

Shippers don’t always have control over when their holiday customers order. But by looking at these rates early, supply chain managers can try to target their UPS shipments to dates that don’t carry additional fees.

What Does This Mean For Shippers in The 2018 Holiday Season?

UPS and FedEx tend to follow one another’s leads. It’s rare for them to pursue different strategies for two consecutive years. That suggests that both companies earned enough from their 2017 holiday surcharges that they don’t see a need to change.

To prepare for the 2018 holiday season, start by reviewing your shipment data and shipping costs from last year.

How much volume did you ship? Did you use same-day delivery? Did you mostly have ground shipments with residential deliveries? How much did you spend on these surcharges? Is there anything you can do to your packaging or your production that could help you dodge added costs this year.

Next, retailers who ship small parcels with UPS should consider whether they can start e-commerce delivery before mid-November, or in early December when per-package surcharges aren’t applicable.

Finally, make sure you collect as much data as you can this holiday season. Think about what you’ll want to know when 2019 rolls around and carriers announce rate increases for the next holiday peak season again. Then, work with a trusted partner Reveel to gather that information, analyze it and put it to work for your company.

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Источник: https://www.reveelgroup.com/fedex-vs-ups-2018-holiday-surcharges/

FedEx Surcharges and Fees You Need to Know About in 2019

FedEx tacks on peak fees during holiday season

Shippers need to monitor and negotiate more than just the base price of their FedEx shipping.

Just as airline or car rental fees increase the ticket or rental base price, FedEx surcharges substantially increase shipping prices. In fact, a comprehensive benchmark report we recently published showed that FedEx shipping surcharges were 28% of the total shipping charges, from a sample size which included more than 4.6 million shipments.

It’s easy to say that a shipper could just negotiate these charges the gate, or proactively adjust their packaging or carrier choice parcel by parcel.

However, shippers don’t always know about the charges until they appear on the bill, and they may be described as service fees, transportation charges, or handling charges, adding to the confusion.

One must dig into the billing, preferably with a software platform that tracks and analyzes their overall shipping data and reviewed by someone with expertise, to better understand all the accessorial charges and what’s being paid.

As a definition, any shipping charges or fees applied to packages that are additional to the carrier’s base rates are surcharges.

Recent history shows that FedEx surcharges and fees change at least twice yearly, with surcharges fuel adjusting on a weekly basis.

FedEx posts a menu of surcharges, and there can be individual fees assessed, or an assortment of fees for each parcel, depending on how many conditions apply to that delivery, and the FedEx Service Guide has additional information.

Here’s what you need to know about FedEx surcharges in 2019.

Fuel

A fuel surcharge is one of the most common FedEx surcharges assessed, and it’s calculated as a percentage of package shipping costs, including other surcharges. It’s assessed to help FedEx offset fluctuating, and often rising, fuel costs.

The charge is not calculated the same way as other surcharges. Our study of more than 2.5 million shipments showed an $0.88 average fuel surcharge per package, resulting in $2.2 million in additional costs for those packages. This is a significant fee to add on to a single parcel, and it adds up quickly.

The FedEx shipping fuel surcharges are not a simple across-the-board percentage. FedEx’s fuel surcharge tables are broken down into domestic FedEx Express, import, export, and FedEx Ground services, and they rely on different fuel type pricing indices.

For example, the US FedEx fuel surcharge changes weekly and is the US Gulf Coast (USGC) spot market price for kerosene-type jet fuel. FedEx Ground services and same-day shipment rely on national highway average prices for diesel fuel and changes weekly.

FedEx Freight service relies on national average diesel fuel and changes each Monday. The surcharges on the bill might be assessed at a previous week’s rates. Since the percentage is applied to the total shipping price, higher surcharges in other areas mean a higher fuel surcharge per parcel.

Delivery Area and Extended Area Surcharges

FedEx applies surcharges for shipping destinations outside of the FedEx network’s delivery area, with a $2.58 surcharge for commercial US Express package services, and a $4.20 surcharge for residential services in 2019 (for both US FedEx Express and FedEx Ground services).

The out-of-network area would be determined by FedEx ZIP Code and is meant to account for rural areas and out-of-the-way deliveries. On the invoice, it might appear as delivery area surcharge (DAS) or extended delivery area surcharge (EDAS).

Unfortunately, using a ZIP Code to determine these surcharges means that shippers will pay more for areas that are sometimes urban but share a ZIP Code with a rural area. Just fuel surcharges, DAS charges are not uniform among FedEx shipping services.

It may be cheaper to send an item through FedEx Home versus FedEx Ground services for delivery to a residential address with a DAS ZIP Code.

Pick-up Charges and Residential Delivery

If FedEx is coming to your business (or your customer’s home) for a pick-up and you are paying the bill, you may pay a pick-up charge. That fee is the pick-up location (e.g. commercial, residential, extended delivery area), and weekly charges are assessed for regular pick-ups at your location as well.

As for delivery, FedEx charges fees to deliver to residential addresses, even if a business is operated from that address or it’s a former residential area that’s been rezoned to commercial status. Using the FedEx Home Delivery network would result in a lower surcharge than using FedEx Ground, and using FedEx SmartPost can eliminate residential delivery fees altogether.

Saturday or Sunday Surcharge

FedEx shipping clients sometimes pay for delivery or pick-ups outside of the traditional Monday to Friday business days.

For FedEx Same-Day City pick-up on Saturday or Sunday, FedEx charges $20, while delivery is $40 per shipment.

For a $16 per package FedEx surcharge, they’ll pick up US FedEx Express packages and FedEx International packages on Saturdays. Saturday deliveries are also a $16 surcharge.

FedEx Freight Saturday pickup or delivery has a higher $210 surcharge each. If the package can be delivered via SmartPost, that can help shippers eliminate this Saturday pickup or delivery fee.

Additional Handling

The FedEx additional handling fee has been in play since 2016, and the carrier charges extra depending on weight, dimensions, or packaging type, depending on the FedEx shipping service. For dimensions, FedEx requires that the package be no greater than 48 inches on the longest side, and no more than 30 inches on the next-longest side, to avoid the fee.

The fee is in place for packages weighing more than 70 pounds as well. FedEx also charges handling fees for some packaging types, if the item is not fully encased in an outer shipping container; the shipment is covered in plastic wrap; or it has wheels, straps, or handles. Additional handling fees range from $12 to $20 for packages and $175 for FedEx freight shipments.

Other Types of FedEx Surcharges

The surcharges already described only cover a portion of FedEx surcharges. Here are some others to know about.

Oversize charge: If a parcel doesn’t fit into FedEx’s defined package maximum size, it qualifies

for the oversize package surcharge, which is $90 in 2019. The FedEx threshold is 96 inches in

length, or 130 inches in dimensional girth (length plus girth) and no more than 70 pounds.

Anything larger, and the package is assessed for the oversize charge. If the package is smaller

than the maximum number of inches, but weighs more than 70 pounds, it also will be assessed

the $90 surcharge.

Peak season: FedEx charges “peak” season increases starting before Thanksgiving and ending just before Christmas. Dates have not yet been announced for 2019. These surcharges apply to domestic FedEx Express and domestic and International FedEx Ground shipments. In 2018, the peak season fees were an additional:

  • FedEx additional handling: $3.20

  • FedEx Ground unauthorized package surcharge: $150 per package

  • FedEx oversize charge: $27.50

Address correction: FedEx charges more for address corrections if the parcel has an incomplete or incorrect address requiring FedEx correction. The published rate for a FedEx surcharge for address correction in 2019 is $16 for non-freight services.

Declared value: FedEx includes a $100 declared value on shipments. Shippers who want a

higher value will pay $3 for values that are $100-300, and $1 per $100 of declared value above

$300 for US services and International Ground services.

Signatures: If the shipper wants a signature on delivery, the price runs $5 to $6.05 depending on signature type.

These are only some of the surcharges FedEx can apply to shipments. Others include cash on delivery, hazardous or dangerous materials, unauthorized packages (those going outside of the weight or size rules), delivery reattempts, non-machinable packages, and third-party billing.

How to Plan for FedEx Surcharges

FedEx changes its surcharge fees at least yearly or, more recently, even twice a year. Costs continue to rise, as can be seen in this year-over-year chart. We updated our list to compare 2018 and 2019 FedEx surcharge rates.

Fortunately, shippers have some ability to lower the rates. First, shippers must understand what they’re paying in surcharges and the types of packages they’re sending, to better understand what discounts would be most helpful. It’s also necessary to understand alternative shipping options, within the FedEx brand and outside of it.

For example, a shipper can use the United States Postal Service (USPS) for some parcels, as they don’t charge a residential delivery fee or Saturday pickup or delivery fees. FedEx SmartPost includes the best of FedEx and the USPS, with the the latter delivering the final leg of the journey, while still using FedEx’s tracking and billing system.

FedEx shipping surcharges are a real pain point for shippers and many don’t have the in-house expertise to understand the minutia of their own shipping practices, let alone how best to negotiate with shippers for the most effective discounts.

Yet our benchmark report shows that 69% of respondents want fewer surcharges in their pricing agreement.

A full 41% said it was hard to negotiate these agreements, but a majority of respondents realized they needed to rely on reporting and benchmark data to drive their negotiations.

The shipping business is exceedingly complicated and constantly changing, making analytical software and an eagle eye expert helpful in navigating the landscape and implementing the best-individualized shipping program. A cost-effective way to access a company’s shipping information across channels, and then analyze it, is to work with a third-party logistics provider.

But whether you partner with an expert or keep this task in-house, remember: with 28% of shipping costs made up of surcharges, this is an area shippers can’t afford to ignore or be ignorant about.

Rob Martinez, DLP is President & CEO of Shipware LLC, an innovative parcel audit and consulting firm that helps volume parcel shippers reduce shipping costs 10%-30%.

Rob offers 25 years’ experience negotiating parcel contracts – on both sides of the negotiating table – for some of the most recognizable brands in the world, and is a sought after speaker and industry thought leader. He welcomes questions and comments, and can be reached at 858.

879.2020 Ext 114 or rob@shipware.com. You can also contact Shipware for a free audit recovery assessment.

Источник: https://parcelindustry.com/article-5276-FedEx-Surcharges-and-Fees-You-Need-to-Know-About-in-2019.html

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