FedEx to Raise Fuel Surcharges for Second Time
Data from San Diego-based parcel consultancy Shipware LLC showed this week that after raising its fuel surcharge index in February, FedEx will raise it again, effective November 2, 2015.
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The increase are for FedEx Express and FedEx Ground fuel surcharges, which Shipware said will result in Express and International fuel surcharge increases of 1.5 percent-to-1.75 percent with Ground fuel surcharge increases of 0.5 percent-to-1.0 percent.
“The rate increases should impact all FedEx shippers unless a specific fuel surcharge table is part of their contract,” wrote Shipware President & CEO Rob Martinez in a research note.
“The changes reflect yet another increase in the same calendar year. On February 2, FedEx Express and International services increased as much as 4 percent.”
“Had FedEx not made the change, shippers would be paying NO fuel surcharge on Express and International packages since February 2015.”
“The February 2015 rate change took Ground products up as much as 3.5 percent from the current fuel surcharge table.”
Putting that into numerical form, if fuel, for example, was at $2.59 per gallon, with a 1.5 percent fuel surcharge in 2014, it will increase 2 percent to 3.5 percent next February.
On the higher fuel price end, it fuel was $3.67 per gallon with a 6 percent fuel surcharge in 2014, it will head up to 6.5 percent for a 0.50 percent difference in February.
Shipware also noted that UPS followed the lead of FedEx for its fuel surcharge tables in February between 0.25 percent-to-0.75 percent for UPS Air and International.
“To be fair to FedEx…has long enjoyed higher fuel surcharges,” noted Martinez.
“The fuel surcharge adjustments FedEx made in February 2015 were designed to bring its fuel surcharge closer to those imposed by UPS. However, like FedEx, UPS also adjusted its fuel surcharge tables simultaneously in February 2015, and Big Brown has collected significantly higher fuel fees from its customers all year.”
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Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman