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August 16, 2021

FedEx, Postal Service Plan Holiday Surcharges

It’s going to get more expensive to ship products due to planned surcharges this holiday season.

By  Christopher Ruvo

Here come the holiday-season shipping surcharges.

FedEx and the United States Postal Service are planning to institute delivery charges for the final months of the year – moves that will make shipping goods domestically more expensive for promotional products companies and other shippers that rely on those organizations. United Parcel Service (UPS) previously announced new surcharges earlier this summer.

“The new delivery surcharges could add extra pressures to merchants’ and retailers’ operating costs because businesses must either absorb the increases or pass them on to their customers,” Insider reported.

Both FedEx and the Postal Service said they need to implement the surcharges to account for anticipated rampant demand and increased operating costs during the holidays.

“These temporary rates will keep the Postal Service competitive while providing the agency with the revenue to cover extra costs in anticipation of peak-season volume surges similar to levels experienced in 2020,” USPS said in a statement.

FedEx, the Memphis, TN-based shipping and delivery services giant, revealed that starting Nov. 1 it will institute a peak surcharge of $1.50 per package for its Ground Economy deliveries: outbound residential deliveries for small- and medium-sized businesses and their low-weight, low-value non-urgent deliveries.

The charge will then accelerate to $3 per piece on Nov. 28 – a rate that will last until Dec. 12 and thereby include the expected Black Friday and Cyber Monday shipping frenzy. From Dec. 13 to Jan. 16, 2022, the surcharge returns to $1.50 per package.

The full slate of FedEx surcharges also include an additional handling surcharge of $5.95 per package from Oct. 4 through Jan. 16, 2022. The charge applies to U.S. Express Package Services, U.S. Ground Services and International Ground Service. Meanwhile, FedEx is also slapping an oversize charge of $62.50 on packages from Oct. 4 through Jan. 16, with the fee applicable to U.S. Express Package Services, U.S. Ground Services and International Ground Service.

At least one new charge will rear after the holiday season. Starting Jan. 17, 2022, FedEx will charge $0.60 more per package for domestic residential delivery through its FedEx Express and FedEx Ground U.S., excluding FedEx Ground Economy and FedEx One Rate packages. There’s no timeline for sunsetting that charge.

Elsewhere, the Postal Service wants to add surcharges on most packages shipped domestically between Oct. 3 and Dec. 26. The surcharges will apply to commercial and retail customers, including packages sent by individuals. International shipments won’t be affected.

Impacted services include Priority Mail Express (PME), Priority Mail (PM), First-Class Package Service (FCPS), Parcel Select, USPS Retail Ground and Parcel Return Service. The surcharges will range from $0.75 per package for PM and PME flat-rate boxes and envelopes up to $5 per piece for certain packages that weigh between 21 and 70 pounds.

The Governors of the Postal Service have already approved the surcharges, but to implement the fees, USPS needs final approval from the Postal Regulatory Commission. As of this writing, that approval was pending. 

Word on the surcharges comes as the promotional products industry, like most industries, deals with supply chain disruption due to fallout from the COVID-19 pandemic. The disruption has slowed the delivery of inventory imports and made importing drastically more expensive, contributing to stock shortfalls and rising product prices. Domestic labor shortages and delays in delivery from domestic truck and rail carriers are other negative factors driving up price and dragging out order production/delivery times.