FedEx has announced its annual Demand (a.k.a. Peak) Surcharges that will last into January 2024.
You can read the full announcement on the carrier’s website – here.
The following are some key highlights:
- In 2022, Peak Season charges were in place for September and Q4. In 2023, Additional Handling Surcharges and Oversize demand charges have been in place year-round.
- International per-pound demand surcharges remain in effect.
- Residential Demand Surcharges will be in place during the Holiday season and include a 6% YoY average increase. For high-volume shippers, its increase in average volume above their June 2023 level will again determine the Peak Residential fees paid.
Illustration 1: Table of All Charges
The Demand Surcharges YoY change seems palatable, as a 6% increase is near the historical average and softer than the increases in 2022 and 2023. Note that the shippers who ‘peak’ less and incur a smaller penalty are actually suffering the highest YoY increase.
A few surcharges related to bulky items, however, are seeing extreme increases compared to 2022.
Illustration 2: Oversize and Additional Handling Fees
The following illustration shows the historical surcharge amounts and when they were/ are in effect for Oversize and Additional Handling fees during Peak season.
What to do next?
Shippers should plan for surges in demand to avoid the more costly peak weeks, such as right after Cyber Monday. A data-driven approach to parcel management is an effective way to anticipate when your costs will be most impacted by these seasonal surcharges.
It is also a great time to renegotiate your parcel contracts. To learn more about how TransImpact can help, email info@transimpact.com.