Resource Center/Article • 06/23/2021
Summer Peak Surcharge Updates, Carriers Discuss Margins and Planet
Some carriers announce updated summer peak surcharges, along with new financial and environmental updates.
PARCEL CARRIER NEWS
FedEx
FedEx announced their increase in peak surcharges, their push to go green, and focusing on their continuous hiring spree.
- FedEx increased peak surcharges and fees go into effect on June 21, 2021. “Our primary focus is ensuring large customer pricing aligns to their volume distribution,” Brie Carere said. “We continue to manage capacity at FedEx Ground, prioritizing our highest yielding same-day delivery segment, as well as our premium home delivery product. As we plan for peak of fiscal year 2022, our peak surcharges will continue to play a critical role.”
- FedEx is continuing their hiring spree. A generic google search shows hiring articles ranging from 150 new employees to 1,200 new employees at different locations all across the country. The majority of these articles are specifically looking for package handlers.
- FedEx is struggling with greenhouse gases, carbon capture, and alternative fuels that come along with having a cargo company. It is important to FedEx to work towards sustainable efforts and in doing this they have set $2 billion aside for this.
UPS
During the carrier’s highly anticipated Investor & Analyst Day, UPS reviewed its future-focused goals, celebrated optimization outcomes, and announced 2023 targets.
- UPS shared new insights into their financial results and company missions during its Investor & Analyst Day on June 9. Notable highlights include:
- The carrier’s five guiding principles for navigating business decisions and solutions in 2021 and beyond are Values, Dividend, Strong Balance Sheet & Credit, Brand Relevance, and Employee Ownership. CEO Carol Tomé noted, “everything else is under review”.
- Additionally, the carrier noted a variety of activities under the “Better, Not Bigger” banner mantra:
- Launched revenue-quality efforts
- Completed our Fastest Ground Ever initiative
- Greatly expanding weekend operations and Digital Access Program
- Training UPSers on diversity and inclusion
- Aligned performance-based compensation metrics with shareowner interests
- Allocating capital to highest returning parts of our portfolio
- Adjusted network to support changing global market
- Sold UPS Freight
- Delivered >300M COVID-19 vaccine doses worldwide; 99.9% on-time delivery
- Moved to a more agile decision-making environment
- Repaid $2.55 billion of long-term debt in 2021
- Notable highlights from Service / Productivity Gains:
- Increasing weekend delivery of commercial and residential volume by +46% without CapEx
- Reducing driver package selection time up to 25% (faster package handling)
- Increasing capacity for Sunday SurePost
- Improving package location to within two meters with “UPS Premier”
- Chicago Area Consolidation Hub (CACH)
- ≈ 1.9M square feet or 39 football fields
- Sped up services in over 330M zip to zip pairs (reduced Time in Transit)
- 150+ Enhancements made to the UPS tracking experience
- Notable highlights from Capacity Improvements:
- 22.5M Square feet of automated sorting capacity added since 2017
- 1.3M additional pieces per hour of capacity
- Optimized driver routes, saving miles and fuel (Original deployment reduced eight miles per driver per day)
- ≈ 2-4 miles per driver per day from dynamic ORION…. 97% deployed
- Beta eVTOL aircraft with 250 mile range with 1,400 pound capacity
- ≈ $250M in cost savings since 2019 with additional benefits in future years
- ≈ 10% improvement in cube utilization & eliminating ≈ 11K container movements each week
- Finally, the carrier shared 2023 financial targets:
- $98 – $102 Billion in Revenue
- Adjusted Operating Margin 12.7% – 13.7%
GRI & SURCHARGES
- FedEx
- FedEx is making changes to its Fuel Surcharge tables for FedEx Express (domestic package and freight services, export and import) and FedEx Ground effective June 21, 2021. Read the announcement.
- FedEx is increasing certain Peak Surcharges beginning June 21, 2021. The surcharges being increased include Peak Additional Handling, Peak for FedEx Ground Economy packages (SmartPost), and the Peak Residential Delivery surcharge. Read the announcement.
- FedEx Freight is implementing a Peak Surcharge effective July 5, 2021 for FedEx Freight Priority & Economy shipments destined to certain ZIP codes. Read the announcement.
- FedEx Canada
- FedEx Canada is making changes to its Fuel Surcharge tables for FedEx Express (intra-Canada package and freight services, export and import) and FedEx Ground effective June 21, 2021. Read the announcement.
- OnTrac
- OnTrac is increasing the Peak Additional Handling charge from $3.00 to $3.50 effective June 23, 2021. Read the announcement.
- UPS
- The Peak Surcharge for shipments from Japan to the U.S. will increase effective June 13, 2021. Read the announcement.
- UPS Canada
- The Peak Surcharge for shipments from Japan to Canada will increase effective June 13, 2021. Read the announcement.
Share this page:
Success with a proven process
