New year. Same message. UPS and FedEx have announced their 2024 demand surcharges, and shippers should prepare for a big surprise on upcoming invoices.

FedEx says it imposes demand surcharges in "times of elevated volumes, high demand for capacity, and increased operating costs across our network." But demand surcharges are beneficial to the carriers' bottom lines, too. During its Q4 earnings call in June, FedEx's EVP and Chief Customer Officer, Brie Carere, said, "we had a really phenomenal peak last year. That's going to be hard to top, but if there's a team that can do it, it's John [Dietrich, EVP and CFO]."

FedEx 2024 demand surcharges

On September 30, 2024, new surcharges take effect for packages that are oversized, unauthorized, or require additional handling. For all other parcels, demand season starts October 28, 2024, and lasts until January 19, 2025. Those surcharges range between $.30 and $3.15 per package.

In addition to the above demand surcharges, enterprise-level customers who ship more than 20,000 weekly packages through FedEx Ground, Home Delivery services, First Overnight, Priority Overnight, Standard Overnight, 2Day A.M., 2Day, and Express Saver will incur residential delivery surcharges ranging from $1.45 to $8.25.

UPS 2024 demand surcharges

UPS CEO Carol Tomé defended the increased peak charges in the Q2 earnings call, saying, "It is the most condensed peak since 2019. There are only 17 days between Thanksgiving and Christmas...Now when you have that kind of volume flowing to your network, you actually have to charge to service them well because you have to hire people and lease aircraft and delivery vehicles."

On July 15, UPS announced its 2024 peak season surcharges, beginning

September 29, 2024, for large packages, parcels that require additional handling, and those over maximum limits. For UPS Air, Ground Residential, and SurePost packages, demand surcharges will be in effect from October 27, 2024, until January 18, 2025, ranging from $.25 to $2 per package.

Like FedEx, UPS also imposes additional surcharges on customers whose Ground Residential, SurePost, Next Day Air Residential, and all other Air Residential shipments exceeded 20,000 packages during any week after October 2023. Once shipping exceeds 105% of the baseline weekly average volume, surcharges range from $1.50 to $8.25.

Are demand surcharges avoidable?

Almost everything is negotiable. While you may be unable to skirt the new demand surcharges, there are ways to pay less on shipping.

ShipRx has decades of experience in the shipping industry, and after starting our careers helping the carriers, we now focus on supporting shippers like you as you seek to save money.

As the carriers work to boost profits, it's never been a better time to negotiate. We have a 100% success rate in our parcel rate negotiations, and we want to help you spend less without losing top-quality service. The best part? We don't earn a cent unless you're saving money.

Get in touch today for a free savings analysis and discover how to save on shipping— even as demand surcharges go into effect.