FedEx says no to extra fees on most residential deliveries in 2017 holiday season

MEMPHIS, Tenn.—FedEx, looking to grow market share in online retail, will stick with regular prices for most shipments this holiday season.

The Memphis-based company said Thursday there will be no residential surcharge, but extra charges will apply to items that require special handling, are oversized or unauthorized, during the holidays.

It was FedEx’s response to rival UPS’ decision, announced June 19, to tack on extra fees for deliveries near the holidays and Black Friday.

The surcharges are meant to offset the expense of expanding and adapting package delivery networks to handle extreme spikes in volume between Thanksgiving and Christmas.

The National Retail Federation has forecast online retail sales will grow 8 percent to 12 percent in 2017, compared with 3.7 percent to 4.2 percent annual growth in total retail sales.

“To support our millions of loyal small-business customers and consumers shipping holiday gifts at FedEx Office and FedEx Onsite locations, FedEx will not apply holiday season surcharges except for packages that are oversized, unauthorized or require additional handling,” said Patrick Fitzgerald, senior vice president of integrated marketing and communications at FedEx.

FedEx will raise fees by $25 between Nov. 20 and Dec. 24 for oversized packages, raising the surcharge to $97.50 for that rapidly growing slice of the delivery market.

Oversized items include mattresses, big-screen TVs, bicycles and trampolines.

The volume of oversized items now accounts for about 10 percent of FedEx Ground deliveries and caused FedEx last holiday season to open six temporary regional annexes. Oversized item shipments during the holidays have increased 240 percent in 10 years.

“These packages consume an inordinate amount of cubic space in FedEx Ground and FedEx Express equipment in the U.S. and Canada,” Fitzgerald said in a news release.

Fees on packages requiring additional handling will rise $3, to $14; and the ground unauthorized package charge will go up $300, to $415, during the holiday shipping season.

UPS will add 27 cents for residential deliveries from Nov. 19 to Dec. 2 and Dec. 17-23. It will charge an extra 81 to 97 cents for overnight, second- or third-day residential deliveries Dec. 17-23.

Fitzgerald also said growth in oversized packages points up an important issue facing Congress: adopting a nationwide standard of 33-foot twin trailers, compared to the current 28-foot twins.

“This would increase package capacity per trip, increase safety on the highways and use less fuel. Thirtythree foot twin trailers are currently permitted in only 20 states, and FedEx advocates for a nationwide standard of twin trailers at 33’ but no increase in total weight,” Fitzgerald said.