FedEx to Begin Levying Peak Surcharges for Residential Shipments Beginning Nov. 1, 2021
Outdoor temperatures may say summer, but a quick glance at the calendar shows that the holidays will be here before we know it. Over 18 months into the pandemic, it’s still difficult to predict consumer behavior. Thankfully, we don’t need to guess. Radial, a leader in omnichannel commerce technologies and operations, recently surveyed 1,000 adults across the United States to discover their holiday shopping plans and found that 65% of Americans plan to spend as much or more than they did last holiday season.
While this is great news for your business, parcel carriers plan to capitalize on increased holiday spending, too. On August 13, FedEx announced updated peak surcharges and fees for U.S. Express and Ground services and Ground International. Today, we’re discussing the peak surcharges and how to avoid them.
How much? Better grab a calculator and some aspirin
FedEx’s new peak surcharges and fees are determined by two different shipping periods:
- If a customer ships an average of more than 25,000 weekly residential and FedEx Ground Economy from October 4-17, 2021, they will be charged Peak — Residential Delivery Charge per Package by Peaking Factor between Nov. 1, 2021–Dec. 12, 2021.
- If a customer ships an average of more than 25,000 weekly residential and FedEx Ground Economy from November 15-28, 2021, they will be charged Peak — Residential Delivery Charge per Package by Peaking Factor between Dec. 13, 2021 – January 16, 2022.
Peaking Factor is calculated by the weekly average residential and FedEx Ground Economy packages shipped during the first date range (October 4-17, 2021 or November 15-28, 2021) divided by weekly average residential and FedEx Ground Economy (formerly SmartPost) packages shipped Feb. 3, 2020–March 1, 2020, and multiplied by 100. Using this formula, businesses can expect to pay an extra $1.15 to $6 surcharge (depending on delivery mode and peaking factor) on each U.S. Domestic FedEx Ground®Residential Package or U.S. Domestic FedEx Express®Residential Package package sent during the second date range (Nov. 1, 2021–Dec. 12, 2021 or Dec. 13, 2021 – January 16, 2022).
Additional peak surcharges levied on FedEx Ground® Economy Package Services are a flat rate of $1.50 (Nov. 1, 2021–Nov. 28, 2021 and Dec. 13, 2021–Jan. 16, 2022) and $3.00 (Nov. 29, 2021–Dec 12. 2021). And these rates are all on top of new fuel surcharges.
Got all that?
ShipRx to the rescue
First thing: Determine if the peak surcharges are going to apply. Let ShipRx perform a complimentary analysis of your current shipping trends and peak projections. In addition to volume analysis, we will review your current pricing agreement to see if any discounting is applicable. Based on this information, we’ll tell you if you can expect to be assessed the fees and provide an estimate of the impact.
ShipRx offers two services designed to save you money. Our team of shipping experts can help you with contract negotiations to secure the lowest possible cost for your industry. After years of working for the carriers, we know the best negotiation tactics to reduce your monthly spending. With shipping on the rise, shipping delays are inevitable. ShipRx’s proprietary parcel audit software tracks 40 different factors to recoup funds when FedEx doesn’t uphold its service guarantee.
With savings on shipping costs, you’re one step closer to making this holiday season “the most wonderful time of the year.”
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