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Update on New FedEx and UPS Peak Surcharges

Update on New FedEx and UPS Peak Surcharges

Sunset is passing along news from FedEx and UPS, concerning their recent surcharge policies on small parcel shipments.  For questions, contact Sunset’s Director of LTL Pricing and Procurement, Steve Pandolfo, or Director of Strategic Account Management, Jill Gross.

Via FedEx.com:

We [FedEx] implemented this surcharge due to the various COVID-19 containment restrictions issued in countries around the world. Those restrictions continue to disrupt the global supply chain. As a result, air cargo capacity is limited, and we are incurring incremental costs as we adjust our international networks to best deliver much-needed goods and services in this constrained environment.

As the impact of the virus continues to generate a surge in residential deliveries and has also generated a surge in oversize, hard-to-handle packages, we have experienced increased operating costs across our network.

The following surcharges go into effect on June 8th, 2020, and will continue until further notice, according to the company.

Surcharge Name Applicable Service Surcharge Amount
Temporary Surcharge FedEx SmartPost® packages1 $0.40 per package
Peak — Oversize Charge Oversize2 U.S. domestic FedEx Express® and FedEx Ground® packages $30.00 per package
Peak — Residential Delivery Charge U.S. domestic residential FedEx Express and FedEx Ground packages3 $0.30 per package

1FedEx SmartPost is a contract-only service.

2Oversize is any package that exceeds 96 inches in length or 130 inches in length and girth. The length and girth of a package is length plus (2 times the height) plus (2 times the width). If the dimension includes a fraction, a fraction of 1/2 or greater will be rounded up to the next whole number; less than 1/2 will be rounded down to the next whole number.

3Applies to customers at the enterprise level who (1) within a given week, ship 40,000 FedEx Express residential and FedEx Ground residential packages combined (excluding FedEx SmartPost and FedEx One Rate®); and (2) whose volume in that same week exceeds 120% of their average weekly volume in February 2020. The scope of a customer’s volume shall be determined by FedEx in its sole discretion. This surcharge will be billed separately. Your FedEx sales representative will reach out to you regarding how it may impact you.

Updated amounts can be found here.

Via UPS:

Surcharge Amount (USD) per Package

Service Level Peak Surcharge-From May 31 Until Further Notice
UPS® Ground Residential $0.30 per package
UPS® SurePost $0.30 per package

U.S. origins and destinations, for qualifying customers whose combined volume of Ground Residential and SurePost packages during the prior week exceeded the customer’s average weekly volume for February by more than 25,000 packages.

Large Packages

Service Level Peak Surcharge-From May 31 Until Further Notice
All Service Levels $31.45 per package

Applies to shippers that shipped more than 500 Large Packages during the prior week, for all U.S. origins and destinations (“Initial Threshold”).

Large Packages are defined as packages with length (longest side of the package) plus girth [(2 x width) + (2 x height)] combined exceeding 130 inches, or with length exceeding 96 inches.

Once the Initial Threshold has been met in any week, the Peak Surcharge will apply to all Large Package shipments at any time regardless of volume in the amounts set forth in the chart below to the indicated service levels and during the specified.

These changes are in addition to previous increases that mostly impacted APAC. 

For more information on all COVID-related UPS Surcharges, click here.