FedEx Holds Line on Holiday Season Delivery Charges

UPS had announced a holiday package surcharge

August 3, 2017

FedEx said it would not add a surcharge for many deliveries during the holiday season, taking a different approach than rival UPS.

UPS announced in June that during a two-week window starting on Black Friday, and in a one-week window in the days leading up to Christmas, it would add a seasonal surcharge.

UPS delivers a slightly larger share of holiday packages than FedEx does. In 2016, UPS handled about 30 million per day during the peak period, the company said. According to a Wall Street Journal report, FedEx's daily volume in the period may double its normal levels, reaching 26 million packages daily.

The FedEx rate announcement does not cover oversized packages. FedEx said the volume of oversized items delivered via its ground network has more than tripled over the past 10 years—such packages now make up roughly 10% of its ground deliveries.

eMarketer expects retail ecommerce holiday season sales to surge 16.6% this year, up from a 14.3% gain in 2016. By comparison, overall US retail sales during the holiday season are expected to rise 3.1% this year, off from the 4.5% increase seen in 2016.

The rapid growth of ecommerce comes amidst ferocious competition over delivery pricing by the major ecommerce rivals, with Amazon and Walmart dueling for advantage. Amazon has reduced the minimum order value required for non-Prime members to receive free shipping twice this year, lowering it to $25. Walmart has unrolled delivery price reductions of its own, plus discounts for consumers who pick up online orders in-store.