The recent article published by CNN entitled “Why you’re still paying a fuel surcharge at FedEx and UPS” created quite a frenzy on Social Media including comments like “increased business means using more fuel, what next, a surcharge to pay for all the extra people they have to hire to count their profits” or, “companies that impose fuel surcharges right now are nothing more than thieves, pure and simple”.
Those are pretty harsh criticisms of two of the world’s largest package delivery companies, which combined represent over $100 Billion in annual revenues. What the article did not state was that every transportation company that we know of has been charging “extra” for fuel surcharges since around 1999 when they first appeared as “temporary” fuel surcharges due to significant spikes in fuel costs at that time.
Well the term “temporary” has now morphed into the term “permanent” and all shippers and consumers need to understand these additional fees are not going away any time soon. Facts also show that the various accessorial fees that both UPS and FedEx charge can amount to 30% of the total revenue the carriers charge for their various services.
Two additional points we would like to make. 1, when these carriers determine their base rates for delivery, don’t they include considerations for the fuel it takes to make those deliveries? And 2, doesn’t the additional Residential Delivery Surcharge these carriers assess include the additional cost of delivery, including the fuel costs? Just some food for thought.
For more information please see: http://money.cnn.com/2015/11/23/news/companies/fedex-ups-fuel-surcharge/
to receive our FREE white papers: