FedEx rolling out complex “Peaking Factor”
As of August 5th, FedEx has announced a new version of how they will calculate this year’s Peak Season
Surcharges. High volume shippers will continue to be the target, while application of these charges include both
U.S. Domestic Ground and Express services. Over and above a general “Peak Surcharge”, these new charges will
extend to Additional Handling, Oversize, Unauthorized and Residential packages. Changes will take effect
beginning September 5th.
As of August 5th, FedEx has announced a new version of how they will calculate this year’s Peak Season
Surcharges. High volume shippers will continue to be the target, while application of these charges include both
U.S. Domestic Ground and Express services. Over and above a general “Peak Surcharge”, these new charges will
extend to Additional Handling, Oversize, Unauthorized and Residential packages. Changes will take effect
beginning September 5th.
AFMS is a parcel analytics, contract benchmarking and consulting company with 30 years in the industry. Our
senior directors were all former pricing and sales executives with FedEx, UPS, DHL, LTL/FTL and more with over 500 years of combined carrier experience and over 3000 worldwide clients. We help companies mitigate these Surcharges and reduce transportation costs.
As the industry morphed, carriers have continued to grapple with the supply/demand curve.
Profit per package has continued to resonate as a mission statement at FedEx. Getting the “right package at the
right time at the right price” is the prevailing edict that seems to follow their rival, UPS. Major carriers have no
problem passing along surcharges and fees to their customers. Weaving a complex web of criteria, time frames
and eligible products. While we all know what type of escalation we have seen on Fuel, trying to figure out the
impact of the Peak Surcharge menu, has become more complex and challenging. If you can’t figure it out...you just
pay it. When the rules of the game keeps changing and the target keeps moving, it becomes increasingly difficult
to hedge for the impact to your transportation budget.
AFMS has been reviewing and creating a strategy to help your company understand these latest surcharges and
how they may impact your company.
Since these are an annual dynamic event, it becomes more critical to stay on top of them....
Peak Residential Breakdown
Peak Residential surcharges have been broken out by:
Peaking Factor, which added two more % categories...
2022 vs 2021. (See Below).
senior directors were all former pricing and sales executives with FedEx, UPS, DHL, LTL/FTL and more with over 500 years of combined carrier experience and over 3000 worldwide clients. We help companies mitigate these Surcharges and reduce transportation costs.
As the industry morphed, carriers have continued to grapple with the supply/demand curve.
Profit per package has continued to resonate as a mission statement at FedEx. Getting the “right package at the
right time at the right price” is the prevailing edict that seems to follow their rival, UPS. Major carriers have no
problem passing along surcharges and fees to their customers. Weaving a complex web of criteria, time frames
and eligible products. While we all know what type of escalation we have seen on Fuel, trying to figure out the
impact of the Peak Surcharge menu, has become more complex and challenging. If you can’t figure it out...you just
pay it. When the rules of the game keeps changing and the target keeps moving, it becomes increasingly difficult
to hedge for the impact to your transportation budget.
AFMS has been reviewing and creating a strategy to help your company understand these latest surcharges and
how they may impact your company.
Since these are an annual dynamic event, it becomes more critical to stay on top of them....
Peak Residential Breakdown
Peak Residential surcharges have been broken out by:
Peaking Factor, which added two more % categories...
2022 vs 2021. (See Below).
Accessorial Breakdown
To further illustrate the complexity, FedEx has split out timeframes for several accessorials. Different from last
year, many have changed, start at an earlier date and apply to more products. Increases ranging from 10% +,
Allowing FedEx the flexibility to apply and calculate depending on a particular week of shipping. Once again a
“moving target” ...
To further illustrate the complexity, FedEx has split out timeframes for several accessorials. Different from last
year, many have changed, start at an earlier date and apply to more products. Increases ranging from 10% +,
Allowing FedEx the flexibility to apply and calculate depending on a particular week of shipping. Once again a
“moving target” ...
United Parcel Service
UPS also announced some Peak Surcharge changes effective August 14th, that specifically apply to APAC countries.
Maintaining rates (per pound basis) for services: UPS Worldwide Express Plus, Express, Saver and Expedited
servicing China, Hong Kong, and Macau to the USA. While decreasing rates (per pound basis) on UPS Worldwide
Express Freight, and Mid-Day Freight by 16.6% to the USA.
Details can be found at:
https://www.ups.com/assets/resources/media/en_CA/Demand_Surcharge_081422.pdf
AFMS has been diligent tracking carrier updates and will continue to provide up to date notifications as they are
made available.
Contact AFMS for a NO COST detailed analysis of how these changes can affect your organization at 800-246-
3521 or visit us at www.afms.com.
UPS also announced some Peak Surcharge changes effective August 14th, that specifically apply to APAC countries.
Maintaining rates (per pound basis) for services: UPS Worldwide Express Plus, Express, Saver and Expedited
servicing China, Hong Kong, and Macau to the USA. While decreasing rates (per pound basis) on UPS Worldwide
Express Freight, and Mid-Day Freight by 16.6% to the USA.
Details can be found at:
https://www.ups.com/assets/resources/media/en_CA/Demand_Surcharge_081422.pdf
AFMS has been diligent tracking carrier updates and will continue to provide up to date notifications as they are
made available.
Contact AFMS for a NO COST detailed analysis of how these changes can affect your organization at 800-246-
3521 or visit us at www.afms.com.