FedEx tacks on new coronavirus surcharge
The delivery company plans to add 30 cents to shipping costs
Morning Business Outlook: The U.S. Postal Service is raising prices in 2020 for flat rate priority packages; Tulsa, Oklahoma is offering qualifying new residents 10,000 to make the move.
Shipping through FedEx is about to get a bit more expensive.
The delivery company will add additional fees to U.S. shipments to offset rising costs and help manage the influx of packages as the coronavirus pandemic keeps many Americans at home.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| FDX | FEDEX CORP. | 293.11 | -2.10 | -0.71% |
| UPS | UNITED PARCEL SERVICE INC. | 133.21 | -1.99 | -1.47% |
Starting June 8, FedEx will charge an additional 30 cents to all packages heading to U.S. households, according to a report in the Wall Street Journal. That applies to customers who ship more than 40,000 packages a week if their weekly shipping volume is more than 120 percent of its average volume in February, a source close to the matter said in the report.
The company will also charge $30 more for all oversize deliveries and a 40 cents surcharge on packages shipped via SmartPost, in which FedEx deposits packages to the U.S. Postal Service.
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The fees are meant to hit large and commercial shippers, forcing them to absorb the costs as their own expenses rise or pass them on to consumers in the form of higher prices for goods.
"As the impact of COVID-19 continues to generate a surge in residential deliveries and oversized items, the peak surcharges will help us manage the demand while maintaining strong levels of service for our customers," a FedEx spokesperson told the Journal.
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The move comes after rival UPS, which announced last week it planned to increase its own shipping costs by 30 cents per package on some lower-priced services under certain restrictions.
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Shares of FedEx closed up 2.93 percent Wednesday but have dropped nearly 13 percent on the year. As for UPS, shares were up 2.45 percent Wednesday and up about 5 percent on the year.
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