As the holiday season is approaching, there is a feeling of excitement in the air. According to some news reports, retail sales may rise this year. With a shorter shopping window, businesses can expect a windfall in their earnings. A strong holiday season will help many small businesses financially. Shipping packages domestically or globally will require a good shipping strategy. Further, an economical shipping carrier will be profitable for business.
Recently, shipping carriers like DHL and UPS announced their holiday season 2024 surcharges. FedEx announced their demand surcharges on Aug. 30, 2024. Further, FedEx announced package shipping fee changes for the coming year on Sept. 13, 2024. This article will focus on the surcharges levied by FedEx. We will also explore the cost-saving opportunities for shippers in the holiday season.
First, understand the FedEx surcharge details..
FedEx surcharge details of 2024
In our earlier article, we discussed FedEx surcharge rates for 2024. Here are some details on the FedEx surcharges of 2024.
- Additional Handling: These FedEx rates are on a parcel or freight weight, dimensions, and packaging. Special handling of these packages requires additional resources. These rates are on a shipping Zone. For instance, U.S.Package Services is $22 per package in Zone 2 by dimension.
- Address Correction: FedEx levies charges for incorrect or incomplete recipient addresses provided by shippers. For example, these charges apply when a recipient’s phone number is missing for a Rural Delivery address in Alaska.
- Clearance fee: FedEx will charge a clearance service fee to shippers for international shipments requiring clearance processing.The fees are for the shipper, recipient, or importer for requesting services. Sometimes, the costs are passed on to FedEx by regulatory agencies such as the U.S. Food and Drug Administration.
- Delivery Area: FedEx shipments destined for remote or less populated locations cost more for shippers. This surcharge is for geographically arduous places to access in the U.S. For example, applicable fees and delivery times vary for regions in Alaska or Hawaii.
- Extended Service Area: This surcharge is for FedEx shipments that have to be delivered or picked up in areas beyond the FedEx primary service areas.
- Ground Unauthorized Package: Packages that
- measure more than 108 inches in length or more than 165 inches in length and girth or
- weigh more than 150 pounds are unauthorized packages, according to FedEx.
These packages may be returned to the shipper or disposed of by FedEx. However, FedEx delivers some of these packages, which may cost more for shippers. These fees are for FedEx ground shipments.
- Oversize charge: FedEx levies surcharges for packages that exceed 96 inches in length. Further, packages of 130 inches in length and girth are labeled extra-large. The rates are fixed based on the shipping zones and the services chosen by the shippers.
- Residential Delivery: This surcharge by FedEx is for shipments with addresses belonging to a home or private residence. It also includes locations, where businesses are operating from a house.
FedEx has many more surcharges, such as Delivery Reattempts, FedEx® Delivery Signature Options, Hazardous Materials, FedEx Ground® C.O.D., etc. Businesses can learn more about FedEx surcharges from the FedEx Service guide of 2024.
FedEx 2024 holiday season surcharges
The peak U.S. holiday schedule is usually from before Thanksgiving till the day after New Year. FedEx has different shipping service levels for zones, pickup areas, and delivery locations. Moreover, FedEx Freight charges a redelivery fee when an unsuccessful delivery attempt is due to no prior notification of customer closure. FedEx has modified service hours and is open or closed on some days during the holidays. For example, FedEx Express services have early on-call pickups in some areas.
Shippers can access the complete details of the FedEx holiday schedule by clicking here.
Due to high demand, shipping carriers have surcharges on some services. Recently, FedEx announced Demand surcharges for the upcoming holiday season. However, 2024 FedEx Demand surcharges are costlier than 2023 rates.
According to FedEx, the reason for the increase in FedEx surcharges is due to
- increase in operation costs
- capacity demand, and
- rising shipping volumes.
FedEx Demand surcharges
Every year, during the peak holiday season, FedEx increases the shipping costs for shippers. FedEx Demand surcharges vary according to the service types and dates. Shippers will have to pay for Demand surcharges for shipments tendered after Aug. 15, 2024. These surcharges for 2024 will also apply to international and FedEx Ground Economy services. It is for shippers with waivers or discounts in their contracts. FedEx has updated Demand surcharges separately for domestic and global services.
U.S. Package Demand surcharge
In 2024, the Demand surcharges for U.S. package shipments include
- Demand- Additional Handling surcharge is for U.S. Package Services and FedEx International Ground Shipments. The amount varies from $7.75 to $10 per package from Sep. 30 2024 to Jan. 19, 2025. Before Sep. 30, 2024, the fee was $3.45 per package.
- Demand — Oversize Charge is for U.S. Package Services and FedEx International Ground Shipments. The fees vary from $84.50 to $100 per package from Sep. 30, 2024 to Jan. 19, 2025. Before Sep. 30, 2024, the price was $39.50 per package.
- Demand — Ground Unauthorized Package Charge is for FedEx Ground, FedEx Home Delivery, and FedEx International Ground Shipments. The amount is $450 to $500 per package from Sep. 30 2024 to Jan. 19, 2025.
- Demand Surcharge for services such as FedEx First Overnight,® FedEx Priority Overnight,® FedEx Standard Overnight,® FedEx 2Day® A.M., FedEx 2Day,® FedEx Express Saver® range between $1 – $2 per package, from Oct. 28–Jan. 19, 2025.
For contract-only service, FedEx Ground® Economy Package Services, the surcharge varies from $1.90 to $3.15 per package from Oct. 28–Jan. 19, 2025.
In addition, for U.S. packages for FedEx Ground and FedEx Home Delivery residential shipments, the Demand surcharges range from $0.30 to $0.55 per package from Oct. 28–Jan. 19, 2025.
- Demand-Residential Delivery Charge changes dynamically weekly. Shippers’ shipping volumes cause different changes in the fees. FedEx levies the surcharge amount for each package using the peaking factor. Shippers can learn more about surcharge amount calculation by checking the FedEx page.
The highest surcharge for the above services is from Nov. 25 to Dec. 29, 2024 (Thanksgiving-Christmas holidays).
U.S. International Demand Surcharge
FedEx International Services has different Demand surcharges for export and import categories. These surcharges are effective from Sep. 16, 2024–Jan. 31, 2025. Moreover, the division of the international package zones is according to countries.
The U.S. Export Demand surcharge is $0.10 per pound for parcel and freight services. The fees are for international shipments to Australia, New Zealand, the Pacific Islands, Canada, and South America. Alternatively, the U.S. Import Demand surcharge for parcel and freight services ranges from $0.10 to $1 per pound. The surcharges vary for shipments coming from various countries.
You can also check with FedEx for the complete surcharge breakdown. After understanding FedEx holiday season surcharges, we must know how businesses can save money.
Cost-saving opportunities for shippers
The FedEx Demand surcharges do not mention volume requirements for shipments. It means that low-volume shippers will also have to pay demand surcharges. Shippers can save shipping costs by offering incentives to customers to shop early. On the other hand, they can opt for regional shipping carriers for short-distance shipping options.
Companies can partner with 3PLs or shipping experts like Audintel for shipping strategies. They can also consider fulfillment centers locally. It will allow shippers to reduce shipping distances and ship in quick time. Shippers can also offer local pickup options to customers and save time and money.
Partnering with Audintel during the holiday season
Calculating surcharges for each package is a daunting task for shippers. Partnering with Audintel helps businesses gain a strong foothold on their shipping expenses. Our Transportation Spend Management services monitor the shipping carrier payments. We have shipping strategies for shippers so they do not pay extra during the holiday season.
In conclusion
High shipping rates will cause a cascading effect during the peak holiday season. Shipping carriers like FedEx have increased the surcharges for the holiday season 2024. Shippers need to understand FedEx surcharges and implement their shipping strategy. Experts like Audintel can help businesses save money during the holiday season.
Audintel domain experts give sound advice to shippers. We provide information regarding surcharges levied by different shipping carriers. With our Business Intelligence (BI) technology, shippers can counter the impact of FedEx holiday season surcharges.
Do you need help with the calculations of the different FedEx surcharges? Do you need clarity on how the peak season surcharges affect your business? Then, contact us at +1 (619) 354 8539, or visit our Audintel website.
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