With UPS , DHL and Amazon all already releasing holiday season surcharges, it was only a matter of time before FedEx followed suit.
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The Memphis, Tenn.-based logistics giant unveiled its demand surcharges for 2024 on Thursday, with most of the primary fees taking effect Oct. 28. Those fees will escalate further on Nov. 25, before reverting to the initial surcharge on Dec. 30. All demand surcharges conclude on Jan. 19, 2025.
Businesses making residential shipments using FedEx Ground and home delivery will see a 30-cent surcharge per parcel, which will jump to 55 cents during the more hectic period of the season. Those shipping via FedEx Ground Economy contract services will see a fee of $1.90 per package, which will jump up to $3.15 per package as of Nov. 25.
All overnight or two-day shipments tack on $1 per parcel as of Oct. 28, before inching up to $2 the month after.
FedEx also implements demand surcharges on packages that are large, oversized or require additional handling.
The “additional handling” surcharges are $7.75 per package at the early portion of the season, before peaking to $10 per box shipped. Oversize charges are $8.45 and $100 per package, respectively. Ground unauthorized package charges—fees for packages that are so big that FedEx Ground has the discretion to refuse, return to the shipper or dispose of them—are now $450 per parcel, and shoot up to $500 during the final weeks of the season.
The company is also bringing back fees that target larger shippers’ volume spikes during the holidays to mitigate strain on its network. Enterprise-level customers shipping more than 20,000 residential and FedEx Ground Economy packages are subject to the company’s “residential delivery charge,” which will adjust dynamically every week.
This charge can range from $1.45 to $7.10 per FedEx Ground or home delivery package, and $2.60 to $8.25 per FedEx overnight or two-day delivery package. The price depends on how much more the customer is shipping compared to their weekly average shipped from June 3 to June 30.
Despite its competitors getting out in front of the surcharge announcements, FedEx coined the “demand surcharges” term last year in a shift in how it would levy traditional peak season fees. At the time, the company said it would implement the added hikes beyond the holiday season when necessary.
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“During times of elevated volumes, high demand for capacity and increased operating costs across our network, FedEx will implement Demand surcharges,” FedEx says on its website. “Demand surcharges are determined for each market based on regular assessments of shipment volume and capacity within our network to accommodate.”
During a company earnings call in June, chief customer officer Brie Carere said she was “incredibly pleased” with the company’s pricing performance in the current market, and how it played into the prior peak season.
“We’re very focused not just on total yield but getting yield in the right place where we need it…I think our team is doing the very best in the market at getting peak surcharges,” Carere said. “The team has done a really good job in getting the increase we need to deliver an amazing peak where we do have to expand capacity. The same goes to rural coverage, as well as large packages.”
The surcharges come as the parcel delivery firm is undergoing a wider network consolidation and massive cost cuts to the tune of $4 billion by 2025 and $6 billion by 2027.
On Aug. 5, FedEx reinstated the demand surcharge for specific zones applicable to U.S. international services. For exports going to Canada and Europe, those surcharges tack on 15 cents, while cargo headed to Southeast Asia and Australia sees a 35-cent bump. Product on its way to Mexico, China, India South America, Japan, South Korea and the Middle East gets a 10-cent fee.
Imports from China, Hong Kong and the Philippines get a 25-cent surcharge.
FedEx is still waiting to release its general rate increase (GRI) for 2025. The company established a 5.9 percent GRI for 2024. Both FedEx and UPS typically hike GRIs at the same rate, raising the fees in lockstep since 2012.
The 5.9 percent GRI that kicked in at the start of 2024 likely would result in a “true impact” of an 8.2 percent hike for FedEx users when depending on other factors such as business volume, according to data from parcel shipping intelligence platform Reveel.
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