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This week in parcel, FedEx announces demand surcharges for 2024, customers emphasize the importance of last-mile delivery success, and fuel prices drop.

FedEx announces 2024 demand surcharges

As expected, FedEx announced demand surcharges effective January 15, 2024. Although the surcharges are lower than in 2023, they are still secondary fees in addition to the 2024 GRI announced in September.

The fees apply to the standard Additional Handling (AHS) and Oversize services. The carrier will charge an additional $2.00 for AHS and $20.00 for Oversize.

Our take: Parcel shippers should recognize this surcharge is on top of the 2024 GRI that’s about to go into effect, and the added cost needs to be accounted for when budgeting . . . and look for UPS to follow suit soon with its own announcement for 2024.

Read more here.

Don’t neglect the last mile this peak season

A delivery experience can make or break a customer’s experience. According to a survey by Shipt, 75% of customers decide where they shop online based on delivery service quality. One mishap could end with consumers taking their business elsewhere.

Mistakes do happen, of course, and shippers should prepare for occasions when the last-mile delivery doesn’t go as planned. Communicate with your customers early and often. Set expectations from the start and update your customers if it’s possible if their delivery won’t arrive on time.

Additionally, if possible, provide alternative drop-off options, such as in-store pickups, that could expedite the delivery process.

Our take: Customers expect to be in the know about the status of their delivery every step of the way. Peak season is in full swing, and it’s important to remember the value that quality customer service brings for online sellers.

Read more here.

Fuel prices are at their lowest since July

For the first time since July, the national average diesel price fell below $4 per gallon. The $3.987 national average was the lowest price since July 24, when it was $3.905 per gallon.

Compared to last year, diesel is 76.7 cents less than it was in 2022. The average price of gasoline, which dropped nearly a dime to $3.316, is 10.3 cents less than it was last year.

Our take: With fuel costs trending down, shippers should ensure the fuel surcharges on their parcel and freight invoices are calculated accurately. It’s a mistake to assume the carriers are invoicing correctly with so much change happening with fuel costs.

See regional averages here.

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