Dive Brief:
- FedEx will adjust its rates and pricing structure for package pickups on Aug. 18, according to an announcement this week from the delivery giant.
- U.S. shippers will incur a weekly charge regardless of service type for regular and automated pickups, unlike current rates which differ for standard and expedited services. Additionally, on-call pickups will begin incurring a per-stop fee rather than a per-package fee.
- FedEx said it needs "a rationalized rating structure" to meet customers' needs as it streamlines its pickup processes across the U.S. The tweaks will simplify pricing while giving shippers more control in scheduling a pickup cadence that suits their needs, the company added.
FedEx pickup fee changes
| Current price | Price effective Aug. 18 | |
|---|---|---|
| Regular | Either $21.50 or $43 per week for standard and economy services. Free for expedited shipments if certain conditions are met. | A weekly fee based on number of pickup days scheduled, ranging from $7.50 to $35.50. On weekends it's $12 per day.* |
| Automated | $18 per week for standard and economy shipping. Expedited services are free on weekdays and $16 per package on Saturday. | A $19 weekly fee on weekdays. A $7.95 fee per day on the weekend. |
| On call | A per-package fee. Generally $3 or $4, save for a $16 charge on Saturdays. | A per-stop fee that varies based on timing and scheduling method. Ranges from $9 to $22.75, plus applicable surcharges. |
*Pickup fees will be charged per location.
Dive Insight:
The changes will come as FedEx integrates its Express and Ground operations via its Network 2.0 overhaul. Part of the initiative involves consolidating the carrier's pickup offerings, so FedEx shippers will have fewer appointments to juggle even if they're using a mix of standard and expedited services.
"Customers have expressed an overwhelming preference for a single pickup," FedEx said on its website.
FedEx's pickup adjustments could help it close the gap with rival UPS, which already has a fully integrated network that can pick up packages using different services in one go. UPS charges $36 per week for scheduled daily pickups, $18 per week for automatic pickups, $14.75 per same-day on-call pickup and $9.05 per future-day on-call pickup, according to its website.
The changes may also benefit FedEx shippers in terms of prices. Scalable pricing for regular pickups based on the number of days used will help shippers with less frequent appointments, and per-stop on-call pickups could lead to savings, said Kenneth Moyer, partner and VP of supply chain strategies at LJM Group.
"If you have eight or 10 packages, it'll be a lot more economical for you to just pay on the pickup basis versus the package basis," Moyer said in an interview with Supply Chain Dive.
However, some customers may have to adjust their pickup processes to mitigate additional costs. For regular pickups, fees will be charged per location, even if the locations are within the same address like a front office and an adjoining warehouse.
"If you have those two pickups, you'll pay two fees, so you'll want to try to consolidate that into one pickup, right? So, take the stuff in the front to the back or vice versa," Moyer said.
Despite FedEx's pricing changes, the carrier said existing pickup scheduling processes will remain in place for the time being, although updates may come in the near future.
