Like many other retailers and shippers around the country (and the globe), you might be lamenting the additional FedEx surcharges that began June 21st. After supply chain disruptions due to COVID-19, the recent round of surcharges felt like a slap in the face. The increased costs for additional handling, peak season delivery, and residential delivery packs a financial punch when you’re sending thousands of packages a month. But where do you turn when other national (and sometimes even regional) carriers are following suit?
It’s time to get creative and partner with GEODIS City Delivery to optimize your last-mile delivery network.
Summary of UPS and FedEx Surcharges
Despite glowing financial reports, FedEx claims high volume and tight capacity (affected by COVID-19) necessitate the added costs. While the additional surcharges ease FedEx’s pain, customers feel the company is literally passing the buck to them. Some experts are beginning to question the wisdom of making customers pay for the company’s insufficient capacity.
So how bad is it?
If you’re a high-volume shipper, then you’re feeling the squeeze more than most and hopefully looking at alternative solutions. In the meantime, here are the latest FedEx Surcharges initiated in June 2021
- Residential delivery surcharges have increased from 30 cents to 60 cents and affect domestic Express and Ground services, excluding Ground Economy and FedEx One Rate.
- The additional handling surcharge has risen from $3 to $3.50 per package, affecting domestic Express and Ground and international Ground services.
- The peak surcharge has increased from 75 cents to $1 per package, affecting Ground Economy deliveries only.
- FedEx extended the peak oversize charge of $30 per package for domestic express and ground and international ground.
Recent UPS Peak Surcharges
On May 23rd, UPS increased fees for:
- UPS Worldwide Express Plus
- UPS Worldwide Saver
- UPS Worldwide Expedited
- UPS Worldwide Express Freight
Surcharges for these services affect shipments from Asian and Oceanic countries, including Hong Kong, China, Taiwan, Korea, Vietnam, Malaysia, Thailand, Indonesia, Singapore, Australia, and New Zealand, to the U.S.
What Does Rising Surcharges Mean for E-Commerce Brands and the Retail Customer?
As e-commerce spiked in popularity during the pandemic, so did residential shipping. This means the residential shipping surcharge will hit retailers the hardest, but will the customer ultimately pay the price?
While a 30-cent increase might not seem like much, it has added up to a massive jump in shipping expenses for high-volume shippers. Wise retailers know that the quickest way to make a buyer abandon an online shopping cart is to increase shipping fees. While free freight is still being offered and retailers are putting a lot of investment in customer loyalty, something’s got to give, right?
How to Bypass National and Regional Parcel Carriers to Keep your Packages Moving and Increase Customers Loyalty
If you want to survive and thrive amidst the rising cost of shipping (and we’re sure you do), it will require specific supply chain optimization. You need a logistics strategy that brings product inventory closer to your customers while bypassing national and regional parcel carriers.
And now is the time to get a plan in place for peak season.
It starts with a GEODIS City Delivery Assessment to determine how to efficiently inject your packages from your DC’s warehouses or 3PL’s partners' sites into major metros for same day and next delivery. Another option is talking fast-moving SKUs and forward staging them in one of our micro-fulfillment locations, which are in urban areas. Both options bypass parcel and regional carriers so that cut out any parcel carrier surcharges and other fees.
If you’re strictly an e-commerce brand and on Shopify, you still have options. GEODIS City Delivery and our eLogistics services can help. Check out our cost-effective solution for emerging brands who are looking for the best end-to-end customer experience.
GEODIS City Delivery is your alternative last-mile delivery partner offering services like:
- Same Day/Next Day
- DTC or B2B
- Ship from Store, DC, Warehouse, or 3PL
- Store Replenishment
- Returns Management
- Urban Micro-fulfillment
The last-mile is the costliest aspect of shipping and delivery for retailers, but it doesn’t have to be.
Connect with GEODIS City Delivery to learn more about how our logistics services can accelerate your last-mile delivery times, expand peak season capacity, and increase your brand value by enabling a better customer experience.