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This week in parcel, FedEx makes several announcements that will affect your shipping.

Meanwhile, carriers expand the options for alternative delivery methods. These could not only satisfy the demand for more environmentally sustainable deliveries but also lower shippers’ costs amid increasing fuel prices.

FedEx announces its 2024 general rate increase and peak season surcharges

It’s been a busy week for FedEx. The carrier started by relabeling peak season surcharges as “Demand Surcharges,” effective September 4. It also announced that Demand Surcharges will begin on October 4.

The surcharges will affect bulky shipments the most and will add fees for Additional Handling, Oversize, and Unauthorized Oversize-eligible packages.

Just a day after announcing its Demand Surcharges, FedEx announced its general rate increase for 2024. While the carrier announced a 5.9% GRI, which we accurately predicted, it did not release the specifics of how the GRI will be applied. The new GRI will go into effect on January 1, 2024.

If you want to get a detailed report when the specifics of the GRI are announced, fill out the form below.


 

Our take: Shippers will need to pay attention to carrier announcements in the coming weeks. UPS won’t be far behind in announcing its seasonal surcharges and GRI. Make sure to follow   for the latest news on cost increases.

Carriers continue to experiment with alternative delivery methods

Carriers are getting creative with how they’re delivering packages.

For a few years now, the New York City Department of Transportation has encouraged carriers to use cargo bikes as a method of last-mile delivery, but it is now looking to allow for bigger cargo bikes in the city. The new rule will permit cargo bikes 12 inches wider and allow a fourth wheel.

In 2022, cargo bikes delivered over 5 million packages. The usage of bikes has reduced CO2 emissions by 650,000 metric tons.

UPS, FedEx, Amazon, and DHL all use carrier bikes in some capacity. Carriers will continue to explore new delivery ideas to reduce costs and meet the market’s appetite for more sustainable options.

Our take: The use of cargo bikes not only allows carriers to meet the market’s appetite for more sustainable options, it can also reduce their costs, especially in seasons of high fuel prices.

Read more here.

Diesel prices on the rise for sixth straight week.

Diesel prices are on the rise for the sixth straight week, rising 8.6 cents a gallon the past week. While diesel is still lower than it was at the same time last year, it has increased by 66.9 cents a gallon since mid-July. It is currently at its highest price since February.

The industry is split on whether prices will continue to rise into peak season. While some believe prices are reaching their peak, factors like heating costs in the Northeast and the effects of storms could produce another spike in costs.

Our take: Fuel costs are increasing at a time when Peak Demand surcharges will also soon be kicking in. Shippers need to manage costs even more closely as shipping ramps up this holiday season.

Read more here.

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