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FedEx follows UPS in raising delivery prices in US amid package surge
[NEW YORK] FedEx is following United Parcel Service (UPS) with plans to raise delivery prices for residential and large packages, as the coronavirus lockdown spurs people to order more online.
Shippers whose volumes have spiked since February will have to pay an extra 30 US cents a package, FedEx said on its website on Wednesday, outlining changes that take effect on June 8. In addition, the courier will charge an extra 40 US cents on "SmartPost" parcels it hands off to the US Postal Service for final delivery, while US$30 will be added to shipments of oversized packages.
"Due to the pandemic and business closures, the FedEx Ground network has been inundated with more costly residential deliveries as well as large packages that are usually picked up in stores rather than shipped," said John Haber, founder of Spend Management Experts.
For couriers, the surge of residential demand during the coronavirus lockdowns has exceeded the traditional peak-season holiday rush. The spike has dragged on profit margins at both FedEx and UPS because drivers travel further and leave fewer packages at each residential stop than when they make commercial deliveries.