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FedEx Cuts Off Some Customers, Imposes Fees

The multinational delivery services company also recently started selling promotional products.

FedEx Corp. cut off its Freight service to about 1,400 customers earlier in June to ease pressure on its overstretched network, news that comes as the delivery services company imposes a shipment fee on Freight deliveries in particular parts of the country.

FedEx boxes on conveyor belt

The Wall Street Journal reported that FedEx “dropped the customers without notice, leaving some businesses hunting for a new option to move their products.” Service had reportedly been restored to hundreds of the suspended customers, but not all as of this writing.

Commenting to WSJ, a FedEx spokesperson said the company temporarily dropped the customers “to minimize network disruptions and balance our capacity and demand to avoid backlogs across the country – particularly in the most capacity-constrained Freight service centers.”

According to some researchers, the COVID-driven surge in online orders of items that then need to be delivered to homes and businesses has strained FedEx Corp.’s resources, resulting in the company not being able to get packages to destinations on time at the same rate as competitors like United Parcel Service (UPS) and the United States Postal Service (USPS).

Meanwhile, FedEx is instituting a $30 per shipment fee on FedEx Freight deliveries after July 5, in certain zip codes. Those include the Sacramento, CA, Seattle, and Miami locales, as well as parts of New Jersey and Long Island, NY. The fee, like the service reductions, are aimed at addressing capacity constraints, FedEx told the Journal.

In April, FedEx Corp. entered the promotional products industry with its FedEx Office subsidiary through a partnership with Texas-based promo distributor Harland Clarke (asi/219943).

Part of marketing solutions company Vericast, Harland Clarke is operating, on behalf of FedEx Office, an e-commerce website in which anyone – from small businesses and schools, to corporations, nonprofits, healthcare systems and more – can have their logo put on a range of promotional products, purchase the items, and have them shipped to locations of their choosing.