FedEx® Announces No Peak Surcharges and Gives a Sneak Peek at 2020 Rate Changes

Let's review the announcements for the quick takeaways and then unpack the details!

Takeaway: Holiday Shipping

FedEx^® will not be applying additional holiday residential surcharges this season but there will be surcharges on packages that are oversized or require additional handling.

Takeaway: 2020 Rate Change

FedEx^® has announced an average rate increase in 2020 of 4.9% for FedEx Ground and FedEx Home Delivery^®, and a 5.9% increase for FedEx Freight.

No FedEx Peak Surcharges This Holiday Season (Well, Yes and No!)

FedEx announced on September 16 that it will not be applying additional holiday residential surcharges. This is great news for e-commerce shippers, and this will mark the third year in a row that FedEx has waived these peak season charges. However, be aware of large, oversized packages because FedEx will be applying surcharges to these! Below, we’ve broken out the three main holiday surcharges shippers should be aware of going into this upcoming season. They apply from October 21, 2019 to January 5, 2020.

• Peak Additional Handling Surcharge: $4.10 per package. This applies to packages that are over 48 inches long, weigh more than 70 lbs. and are not fully encased in a covering.
• Peak Ground Unauthorized Packages Charge: $435 per package. This applies to packages measuring more than 108 inches in length and weighing greater than 150 lbs.
• Peak Oversize Charge: $37.50 per package. This applies to packages that exceed 96 inches in length and have the dimensional weight greater than 90 lbs.

4.9% General Rate Increase Announced for 2020

FedEx also announced its General Rate Increases for 2020. Effective January 6, 2020, FedEx Express, FedEx Ground and FedEx Home Delivery shipping rates will increase by an average of 4.9%, and FedEx Freight will increase rates by an average of 5.9%. This is not surprising, since this is the same average rate increase the FedEx implemented last year.

Depending on the type of shipper you are you may see increases more or less than the average 4.9%. Our Quadient team will break down more key takeaways from the rate change over the upcoming weeks. Below are some changes your business should be aware of:

FedEx is Changing Surcharge Definitions and Increasing Surcharge Costs

FedEx is implementing an increase in fees and surcharges starting January 20, 2020, which are going up much faster than the regular year-over-year parcel rates. If you are a shipper sending large or heavy items pay close attention. (Or stay signed up for our NeoNews newsletter and we'll keep you in the loop). 

The top FedEx surcharges that are changing:

• Additional Handling Surcharge: will now be applied to packages being shipping FedEx Express and FedEx Ground U.S. that are over 50 lbs.   
• Oversize Charge: will now be applied to FedEx express international shipments as well as U.S. domestic shipments.

Get Prepared for Rate Change with These 5 Steps

As rate change season begins it is important to understand the major changes to each carrier’s rates and surcharges, and how they will affect your business. This is never easy, but Quadient has your back. Let us do the heavy lifting and help you get the right workflow, tech, and information to manage your shipping process and budget this holiday season and beyond. If you are more of a DIY-er we’ve compiled some tips below for preparing for holiday shipping.

1. Negotiate with carriers regularly, especially before rate changes go into effect
2. Understand what weights and zones you ship to the most so you can drill down into those in particular when the new rates are announced.
3. Understand how changes to fees and surcharges affect your business 
4. Audit your invoices regularly
5. Utilize technology to compare carrier rates

Quadient is here to help! Creating a budget and getting prepared amidst changing rates and increasing surcharges isn’t easy. Many shipping veterans and newbies find complex shipping rates and ever-changing shipping tech hard to manage. Give our shipping experts a call 855.405.5087 and get your shipping process on track for success!

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