Understanding FedEx Surcharges: A Comprehensive Guide for Shippers

Introduction

As the logistics landscape continues to evolve, shippers face an ongoing challenge: managing the ever-changing world of surcharges. For those who have been in the shipping game for over a year, it's no secret that FedEx surcharges have seen a significant uptick across the board. These additional fees, associated with specialty shipping services, can have a substantial impact on your bottom line. At FreightAmigo, we understand the importance of staying informed about these changes and helping our clients navigate the complex world of shipping costs.

In this comprehensive guide, we'll delve into the FedEx surcharges that went into effect on January 4, 2021, for FedEx Express, FedEx Ground, and Home Delivery services. By understanding these charges, you'll be better equipped to make informed decisions about your shipping strategy and potentially find ways to optimize your costs.

The Basics of FedEx Surcharges

Before we dive into the specific surcharges, it's essential to understand why these fees exist and how they're implemented. FedEx, like most couriers, adjusts its surcharges on an annual basis. This practice is primarily driven by the increasing costs of fuel and other shipping-related factors. By implementing these surcharges, FedEx aims to maintain its service quality while adapting to changing market conditions.

Now, let's explore the various FedEx surcharges that shippers need to be aware of in 2021.

1. Address Corrections

In the fast-paced world of e-commerce, mistakes happen. Sometimes, a package needs to be rerouted or an address needs to be corrected. In 2021, FedEx has increased its address correction fee to $18, up from $17 in 2020. This charge applies when you need to change the delivery address of a shipment before it's delivered or if you want to reroute a package to a different address while it's in transit.

2. Collect On Delivery (COD)

For businesses looking to minimize processing costs associated with credit cards, physical checks, and monthly bank fees, the Collect On Delivery (COD) option can be attractive. However, it's important to note that this service comes with its own fee. In 2021, FedEx charges $16.50 per package for COD, an increase from $15.50 in 2020.

3. Dangerous Goods

Shipping items that are classified as dangerous goods requires special handling and, consequently, incurs additional charges. For FedEx Express services, the surcharge for dangerous goods stands at $6.15 per package. However, it's crucial to understand that there are different categories of dangerous goods, each with its own fee structure:

• "Accessible" dangerous goods: These items must be kept near the driver or be easily accessible. Examples include explosives or flammable liquids. The minimum fee for these items is $115 per package, adjusted by weight.
• "Inaccessible" dangerous goods: These can be stored with regular packages and include items like lithium batteries. The minimum fee for these is $54.50 per package, adjusted by weight.

4. Ground Unauthorized Package Charge

One of the most significant surcharges in the FedEx fee structure is the Ground Unauthorized Package Charge. This fee applies to packages that exceed specific size and weight limits:

• More than 108 inches in length
• More than 165 inches in length and girth combined
• Weighing more than 150 pounds

If FedEx discovers that you're shipping a package of unauthorized size, you'll be hit with a steep $920 fee - a significant increase from $875 last year. Moreover, the carrier may refuse to transport your item until this fee is paid.

5. Additional Handling Surcharge

Oversized packages that exceed certain dimensions are subject to an Additional Handling Surcharge. The criteria for this surcharge include:

• 48" on the longest side
• 30" on its second-longest side
• 105" in length and girth combined

For 2021, the dimensions-related handling surcharges have increased by one dollar. Weight-related surcharges have also seen an uptick. You'll now pay $25.50 per package for domestic packages above 50 pounds and international packages weighing more than 70 pounds.

6. Delivery Area Surcharge

Shipping to remote areas within the 48 contiguous states or certain parts of Alaska and Hawaii? Be prepared for a delivery area surcharge. As of 2021, this fee stands at $3.25 per package for most services. However, express packages to extended commercial addresses attract a slightly higher fee of $3.85 per package.

7. Oversize Charge

FedEx considers a package "oversized" if it exceeds 96" in length or 130" in length and girth combined. The fee for oversized packages has increased to $105 for Express/Ground services, up from $100 in 2020. It's worth noting that oversized packages destined for residential areas incur an even higher charge of $130 per package.

8. Residential Surcharge

If your business model involves sending packages directly to customers' homes, you'll need to factor in the residential surcharge. For 2021, this fee stands at $4.95 per package for Express and International Package services, up from $4.65 in 2020. For Domestic or International Ground packages, the surcharge is slightly lower at $4.80 per package, while FedEx Home Delivery service incurs a $5.00 per package fee.

9. FedEx Delivery Signature

For shipments that require a signature upon delivery, FedEx charges a delivery confirmation fee. As of 2021, this feature costs $6.70 per package.

10. FedEx Peak Surcharges

To manage the strain of increased shipment volumes during busy periods, FedEx implements peak season surcharges (PSS). These surcharges are particularly relevant during holiday seasons when the courier is operating at or near full capacity. In response to the increased demand brought about by the COVID-19 pandemic, FedEx has introduced the following peak surcharges:

• Ground Economy: $0.75 additional per package
• Express Services, Ground, and International Ground: Up to $3.00 additional per package
• Oversize packages: An additional $30 fee on top of the usual oversize fee

11. Third Party Billing Service

When duties, taxes, or other shipping costs are paid by someone other than the sender or recipient, a third-party billing surcharge applies. This FedEx surcharge is set at 4.5% of your net transportation charges.

Navigating FedEx Surcharges with FreightAmigo

As we've seen, FedEx surcharges can significantly impact your shipping costs. At FreightAmigo, we understand the challenges these fees pose to businesses of all sizes. That's why we've developed our Digital Logistics Platform to help you navigate these complexities and optimize your shipping strategy.

Our platform offers several key features that can help you manage and potentially reduce the impact of FedEx surcharges:

1. Rate Comparison: Our door-to-door freight quote comparison tool allows you to compare rates across multiple carriers, including FedEx. This empowers you to make informed decisions based on your specific shipping needs and budget constraints.
2. Shipment Tracking: With our real-time tracking feature, you can monitor your shipments across more than 1000 reputable airlines and shipping lines. This visibility can help you proactively address any potential issues that might lead to surcharges, such as address corrections.
3. Customs Clearance and Insurance: Our one-stop solution for arranging customs clearance and cargo insurance can help you avoid unexpected fees and ensure smooth international shipments.
4. Document Automation: By automating your shipment documents, we help reduce errors that could lead to surcharges, such as those related to dangerous goods or oversize packages.
5. Expert Support: Our 24/7 logistics expert support can provide guidance on how to minimize surcharges and optimize your shipping strategy.

Conclusion

Understanding and managing FedEx surcharges is crucial for any business that relies on shipping. While these fees can seem daunting, they're a necessary part of the shipping ecosystem, reflecting the real costs associated with various specialty services and market conditions.

At FreightAmigo, we're committed to helping you navigate these challenges. Our Digital Logistics Platform is designed to provide you with the tools and insights you need to make informed decisions about your shipping strategy. By leveraging our rate comparison tools, real-time tracking, document automation, and expert support, you can better manage your shipping costs and potentially find ways to reduce the impact of surcharges on your bottom line.

Remember, shipping is not just about getting your products from point A to point B - it's about doing so in the most efficient and cost-effective manner possible. With FreightAmigo as your partner, you can turn the challenge of surcharges into an opportunity to optimize your logistics operations and drive business growth.

Are you ready to take control of your shipping costs? Explore how FreightAmigo's Digital Logistics Platform can help you navigate FedEx surcharges and optimize your shipping strategy. Contact us today to learn more about how we can support your logistics needs in this ever-changing shipping landscape.