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FedEx to raise fuel surcharges again

The planned Nov. 2 rate hike will be FedEx’s second in nine months, according to multiple media reports.

   FedEx Corp. will raise fuel surcharges shipments moving via its air and ground parcel services, effective Nov. 2, according to an update from the company.
   Media reports indicate that this is the second time in nine months the company will increase fuel surcharges thanks to the prolonged drop in crude oil and refined fuel prices.
   Specific increases will vary depending on the current prices of jet and diesel fuel, according to FedEx’s updated fuel surcharge tables. If the price of jet fuel is between $1.35 and $1.39 a gallon, roughly equivalent to the current market price, for example, the surcharge will be 2.5 percent. If the cost of jet fuel drops further, to between $1.19 and $1.23 per gallon, for example, the surcharge will fall to 1.5 percent.
   The increases will apply to all FedEx Express and Ground customers except for those that have individualized fuel-surcharge tables written into their specific contracts.
   The company in February raised fuel surcharges for FedEx Express, which covers air and international services, and FedEx Ground, which covers ground, home delivery and “Smart Post” services, by 4 percent and 3.5 percent, respectively. Under its “Smart Post” service, managed in conjunction with the U.S. Postal Service, FedEx outsources parcels to USPS for last-mile deliveries.
   FedEx spokesperson Jess Bunn told media outlet DC Velocity that the fuel surcharge hike is due to the rapid growth of e-commerce, which is causing the company to handle more residential deliveries. This results in an increase in the number of delivery stops and distance between those stops, which, in turn, adds to the company’s fuel and operational costs.
   In addition, “typical” packages handled by FedEx Ground have increased size and weight, adding to the unit’s operating costs and fuel consumption, according to Bunn.