FedEx, in online pivot, backs away from holiday surcharges

In this April 10, 2017, photo, a FedEx envelope is placed into a dropbox in North Andover, Mass. FedEx Corp. says there will only be a surcharge during the holiday season on packages that need additional handling, are oversized or unauthorized. The move comes as the package delivery company and rival UPS jockey for customers that are increasingly doing their holiday shopping online and have packages shipped. (AP Photo/Elise Amendola)

FedEx says it will only have a surcharge during the holiday season on packages that need additional handling, are oversized or unauthorized

MEMPHIS, Tenn. — FedEx will skip special charges for most packages shipped during the holiday season this year as it seeks to undercut rival UPS in a fight for a larger share of the millions of items now bought online.

FedEx Corp. said Thursday that it won't charge extra for peak-season residential deliveries unless the package requires extra handling, such as for very large items.

On an average day, FedEx delivers more than 12 million packages to businesses and homes, but that can jump to 25 million on peak days in December.

Residential shipments represent a much smaller share of the company's revenue, but they are growing faster because of the rise of online shopping. Residential deliveries are relatively inefficient because homes are so spread out and a driver might take one package to a house instead of several to a business — that raises costs for FedEx.

The shipper, based in Memphis, Tennessee, said that from Nov. 20 through Dec. 24 it will add surcharges of $3 for packages needing special handling, $25 for oversized items, and $300 for unauthorized shipments.

FedEx's announcement comes two months after UPS announced new surcharges that will impact shipments in some weeks near Black Friday and Christmas.

United Parcel Service Inc. said that it would add 27 cents for residential deliveries from Nov. 19 to Dec. 2 and Dec. 17-23. It will add a fee of between 81 and 97 cents to overnight, second- or third-day deliveries for residential deliveries Dec. 17-23. There are other charges for oversized packages.

In addition, UPS will charge a peak surcharge on some international air-shipping routes.

UPS, based in Atlanta, did not immediately comment on the maneuver by FedEx. In an interview last week, UPS CEO David Abney said his company used the surcharges to encourage big shippers to adjust some promotions and shipments to help UPS smooth out its holiday-season volumes.

In midday trading, FedEx shares fell 58 cents to $208.92, and UPS shares dropped 30 cents to $110.96.

Related News

Hawaii authorities urge awareness of raw food risk

Aug 17, 2016

Hawaii authorities are urging diners to be aware of the risks of eating raw and undercooked food after they traced a hepatitis A outbreak to frozen scallops served raw at a sushi restaurant chain

Are France's burkini bans sexist, or liberating?

Aug 17, 2016

Male officials are dictating what women can wear on French beaches _ and people across a wide swath of French society say that's a good thing

Target cuts outlook as it sees fewer customers in stores

Aug 17, 2016

Target cut its profit forecast and a key sales outlook amid stiffer competition and its own stumbles in areas like groceries

Broaden News

Travel Stylo is an independent online travel website started by a group of friends who love traveling together. With Travel Stylo, you can travel with style.

Contact us: sales[at]travelstylo.com