Categories: Business

FedEx raising fees due to surge in demand, boost in ‘oversize’ parcels


FedEx is raising its shipping price as the growing demand for residential deliveries due to the coronavirus pandemic has increased the company’s operational costs.

As the pandemic—and recently, the George Floyd protests—forced people across the U.S. to stay at home and rely on delivery services, FedEx added additional payments on its shipping services.

Meanwhile, other shipping utilities such as United Parcel Service (UPS) have already made their move prior to FedEx’s price increase.

FedEx followed suit UPS’ price raise

Starting June 8, FedEx will add US$0.30 to US$30 [AU$43] per package, depending on the type of delivery service. The said changes were announced on Wednesday, June 3, following the UPS scheme to charge customers an extra fee due to a surge in demand for deliveries.

In a blog post, the delivery-giant explained that the surcharges were based upon the recent spike in the volume of packages. A surge in residential deliveries, according to FedEx, has dramatically boost “hard-to-handle and oversize” parcels as well, which resulted in higher-than-before operating costs.

The founder of Spend Management Experts John Haber said the increase in FedEx and UPS operational costs had pulled the delivery services’ profit margin to spiral down.

“Due to the coronavirus crisis and business closures, the FedEx Ground network has been inundated with more costly residential deliveries as well as large packages that are usually picked up in stores rather than shipped,” Haber told Bloomberg.

The delivery-giant will charge customers with an additional 30 cents and 40 cents (temporary) on its SmartPost and Residential delivery services, respectively. An extra $30 will be added on “oversize” packages as well.

Protests delay FedEx deliveries

In other news, the recent killing of George Floyd has slowed down FedEx’s deliveries—among many other shipping services—as well. Widespread protests and the recently implemented curfews in every state has unfortunately caused delays.

Some FedEx vehicles and stores were vandalized, too, as told by a FedEx spokesperson to Business Insider. But he assured that operations would continue despite the political unrest spreading in the United States.

In his statement via Business Insider, he said:

“We are reaching out directly to customers whose shipments are affected. […] FedEx continues to operate in places where we are able to do so safely. We are taking the proper precautions to help ensure team members stay safe.”

At the same time, FedEx CEO and COO Frederick Smith and Raj Subramaniam posted an open letter addressing the “extraordinarily difficult time” the country is facing. It also said that the company “would not rest in pursuit of a world where everyone is treated equally.”

UPS and Amazon have also implemented safety measures amid the ongoing protests in different cities. Both have re-routed its drivers and continued its delivery services on areas that were deemed safe.

Images courtesy of Erikleenaars/Flickr, Free-Photos/Pixabay

Kari Astillero

Kari Astillero is a freelance digital content writer by profession and a poet by heart. She works at home trying to guard her solitude from the city's noise.

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