FedEx Demand Surcharges for 2024 Peak Season

During times of high demand, such as the holiday shipping season, FedEx implements demand surcharges to manage elevated shipment volumes, increased capacity needs, and rising operating costs across its network. These shipping surcharges vary depending on the service type, package size, and shipping period. Below, we provide a detailed overview of the demand surcharges FedEx will apply during the 2024 peak season.

U.S. Domestic FedEx Demand Surcharges

As FedEx prepares for the holiday shipping season, it anticipates a surge in volume that will likely continue into the new year. To maintain service quality, the following demand surcharges and fees will be implemented: Note: FedEx Ground Economy is a contract-only service.

Demand — Residential Delivery Charge

FedEx’s Demand — Residential Delivery Charge adjusts dynamically each week. During each “calculation week,” the shipping volume and peaking factor are determined based on the formula provided by FedEx. The surcharge is then applied two weeks later during the “application week.”

Calculation Week: The week during which the customer’s shipping volume is calculated.

Application Week: The week during which the surcharge is applied based on the corresponding calculation week.

For customers at the enterprise level shipping more than 20,000 residential and FedEx Ground Economy packages during a calculation week, the Demand — Residential Delivery Charge applies for the corresponding application week. This surcharge is in addition to the standard Residential Delivery Charge, and any contracted discounts or caps will not apply.

Demand — Residential Delivery Charge per Package by Peaking Factor

2024-2025 Demand–Residential Delivery Charge Calculation Weeks/Application Weeks Schedule

FedEx’s Demand Surcharges are assessed separately and are distinct from other existing surcharges. They apply to certain shipments based on updated demand assessments and are subject to change. It’s important for customers to review their shipping practices and adjust as needed to mitigate these additional costs during peak seasons.

FedEx International Demand Surcharges

In addition to the domestic surcharges, FedEx has also implemented demand surcharges for U.S. international shipments. FedEx’s 2024-2025 import and export demand surcharges for U.S. international services vary by zone and service type. For exports, surcharges effective through April 28, 2024, range from $0.10 to $0.35 per pound for parcels and freight, with minimum charges per shipment ranging from $1.00 to $20.00 depending on the zone. For imports, surcharges effective August 5, 2024, include no fees for most zones, while Zones F and N incur charges of $0.25 per pound for both parcels and freight, with a minimum of $1.00 per shipment for parcels and $0.50 for freight. These surcharges are designed to offset the costs associated with high demand and operational challenges during peak periods. For detailed information on specific zones and rates, visit the FedEx website. To manage these surcharges effectively, businesses must plan their demand fulfillment strategies carefully, considering both domestic and international shipping needs to optimize costs and maintain service quality.

Key Insights from FedEx’s 2024 Peak Season Surcharges

Higher Surcharges and New Fees for 2024:

FedEx’s 2024 peak season surcharges are notably higher than the previous year and introduce two new fees. These increases, effective from September 30, 2024, impact packages that are oversized, unauthorized, or require additional handling. Demand surcharges for various FedEx delivery services begin on October 28, 2024, and all peak season fees will conclude on January 19, 2025. The peak season surcharges are closely aligned with those of UPS, with slight variations in dates and pricing. Both companies have introduced new charges for air and ground shipping services this year, reflecting a competitive and challenging market landscape. Visit our comprehensive comparison article for a detailed side-by-side comparison of FedEx and UPS demand surcharges.

Breakdown of New Fees:

Additional Handling Surcharge: Ranges from $7.75 to $10 per package, effective from September 30, 2024, to January 19, 2025. Oversize Charge: Ranges from $84.50 to $100 per package, effective during the same period. Ground Unauthorized Package Charge: Between $450 and $500 per package for shipments via FedEx Ground, FedEx Home Delivery, and FedEx International Ground.

New Demand Surcharges:

Demand Surcharge for Express Services: Includes First Overnight, Priority Overnight, Standard Overnight, 2Day, 2Day A.M., and Express Saver services (excluding One Rate packages), ranging from $1 to $2 per package. Demand Surcharge for Ground Residential Shipments: For FedEx Ground residential shipments and FedEx Home Delivery, surcharges range from $0.30 to $0.55 per package. Demand Surcharge for FedEx Ground Economy Package Services: Ranges from $1.90 to $3.15 per package. Residential Delivery Charge: For enterprise-level customers shipping over 20,000 residential and Ground Economy packages, this charge ranges from $1.45 to $8.25 per package, based on deviations from baseline shipping volumes.

Purpose and Strategy Behind the Surcharges:

FedEx has stated that the surcharges are necessary to prepare for high demand and to maintain strong service levels during the holiday season. The surcharges also help offset the increased costs associated with hiring seasonal workers and expanding capacity to handle the surge in volume.

Mitigation Strategies for Shippers:

Shippers can take several steps to mitigate peak surcharges, such as encouraging customers to shop early to avoid the highest surcharge periods, exploring regional fulfillment options to reduce shipping distances and fees, or offering ship-to-store or local pickup options to minimize costs.

Curious how holiday shipping costs compare? Check out our side-by-side comparison of peak season surcharges from USPS, UPS, and FedEx to find the best option for your shipping needs this season.

How 3PL Center Can Help You Navigate Demand Surcharges

Navigating the complexities of shipping during peak seasons can be challenging, especially with fluctuating surcharges like those from FedEx. At 3PL Center, we understand the impact of these added costs on your business and are here to help you avoid shipping surcharges with our strategic solutions. Nationwide Shipping: With our multiple warehouse locations strategically positioned across the country, we ensure that your products reach customers faster and at a lower cost. Expertise in Managing Oversized Shipments: We specialize in handling large and oversized shipments efficiently. Advanced Warehouse Management System (WMS): Our state-of-the-art WMS provides comprehensive tracking, reporting, and inventory management tools, ensuring complete visibility over your shipments. With features like box optimization and carrier rate shopping, we help you find the most cost-effective shipping solutions, even during peak seasons when surcharges are at their highest. This system is designed to support your demand fulfillment needs by optimizing resources and reducing costs. Flexible and Scalable Fulfillment Solutions: Whether you need eCommerce fulfillment, kitting and assembly services, or cross-docking, we provide flexible and scalable solutions tailored to your business needs. Our ability to adapt to fluctuating shipping demands helps you maintain operational efficiency and customer satisfaction, regardless of the season.

Maximize Your Savings with 3PL Center

By partnering with 3PL Center, you can navigate peak season surcharges with ease and confidence. Contact us today to learn more about how we can help streamline your logistics and optimize your shipping strategy.

FAQs on FedEx Demand Surcharges

What factors determine the FedEx demand surcharges for my shipments?

Demand surcharges are primarily determined by factors like shipment volume, service type, package size, and the destination zone. Seasonal demand and operational costs can also affect the surcharge amounts.

Are demand surcharges applicable to all FedEx services and shipments?

No, demand surcharges are applied selectively based on the type of service (e.g., domestic, international, express) and specific shipment characteristics. Certain services, like FedEx One Rate packages, may not be subject to these surcharges.

Can I avoid FedEx demand surcharges by choosing a different shipping method?

While you cannot entirely avoid demand surcharges during peak periods, selecting alternative services or adjusting your shipping schedule might reduce the surcharge impact. Working with logistics providers like 3PL Center can also help you find the most cost-effective demand fulfillment solutions.