FedEx backs away from hol­i­day sur­charges

Ship­per seeks to un­der­cut ri­val UPS

Cape Breton Post - - Business -

FedEx will skip spe­cial charges for most pack­ages shipped dur­ing the hol­i­day sea­son this year as it seeks to un­der­cut ri­val UPS in a fight for a larger share of the mil­lions of items now bought on­line.

FedEx Corp. said Thurs­day that it won’t charge ex­tra for peak-sea­son res­i­den­tial de­liv­er­ies un­less the pack­age re­quires ex­tra han­dling, such as for very large items.

On an av­er­age day, FedEx de­liv­ers more than 12 mil­lion pack­ages to busi­nesses and homes, but that can jump to 25 mil­lion on peak days in De­cem­ber.

Res­i­den­tial ship­ments rep­re­sent a much smaller share of the com­pany’s rev­enue, but they are grow­ing faster be­cause of the rise of on­line shop­ping. Res­i­den­tial de­liv­er­ies are rel­a­tively in­ef­fi­cient be­cause homes are so spread out and a driver might take one pack­age to a house in­stead of sev­eral to a busi­ness – that raises costs for FedEx.

The ship­per, based in Memphis, Ten­nessee, said that from Nov. 20 through Dec. 24 it will add sur­charges of $3 for pack­ages need­ing spe­cial han­dling, $25 for over­sized items, and $300 for unau­tho­rized ship­ments.

FedEx’s an­nounce­ment comes two months af­ter UPS announced new sur­charges that will im­pact ship­ments in some weeks near Black Friday and Christ­mas.

United Par­cel Ser­vice Inc. said that it would add 27 cents for res­i­den­tial de­liv­er­ies from Nov. 19 to Dec. 2 and Dec. 1723. It will add a fee of be­tween 81 and 97 cents to overnight, sec­ond- or third-day de­liv­er­ies for res­i­den­tial de­liv­er­ies Dec. 17-23. There are other charges for over­sized pack­ages.

In ad­di­tion, UPS will charge a peak sur­charge on some in­ter­na­tional air-ship­ping routes.

UPS, based in At­lanta, did not im­me­di­ately com­ment on the ma­noeuvr by FedEx. In an interview last week, UPS CEO David Ab­ney said his com­pany used the sur­charges to en­cour­age big ship­pers to ad­just some pro­mo­tions and ship­ments to help UPS smooth out its hol­i­day-sea­son vol­umes.

In mid­day trad­ing, FedEx shares fell 58 cents to $208.92, and UPS shares dropped 30 cents to $110.96.

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