FedEx adds new delivery fees targeting high-volume shippers

Dan Berthiaume
Senior Editor, Technology
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FedEx is the latest delivery provider to apply peak surcharges in response to COVID-19 volume surges.

Starting June 8 until further notice, FedEx is applying temporary surcharges to all domestic deliveries involving its contract-only SmartPost service (which relies on USPS for the final leg) and oversized packages, as well as domestic residential FedEx Express and FedEx Ground packages from companies who exceed certain volume limits. Rival delivery service UPS has been making select U.S. domestic packages subject to one or more peak surcharges since May 31.

All FedEx SmartPost packages will have a surcharge of $0.40 per package. Any oversize U.S. domestic FedEx Express or FedEx Ground package that exceeds 96 inches in length or 130 inches in length and girth will receive a surcharge of $30 per package. 

And in a move that will particularly affect high-volume shippers, such as Amazon and Best Buy, enterprise customers who within a given week ship 40,000 FedEx Express residential and FedEx Ground residential packages combined (excluding FedEx SmartPost and FedEx One Rate) and whose volume in that same week exceeds 120% of their average weekly volume in February 2020 will be surcharged $0.30 per package.

Like UPS, FedEx did not apply additional residential surcharges during the 2019 holiday season. FedEx set a higher starting point for a bulk volume surcharge to kick in (40,000 compared to 25,000 for UPS) and is charging roughly 5% less than UPS’ $31.45 per parcel oversized package fee.
“As the impact of the virus continues to generate a surge in residential deliveries and has also generated a surge in oversize, hard-to-handle packages, we have experienced increased operating costs across our network,” FedEx said in a corporate blog post announcing the surcharges.