UPS, FedEx Fees on Heavy Packages to Hit Consumers and Merchants
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The Wall Street Journal recently reported that both UPS and FedEx are raising prices for the new year, including a new $24 fee on packages that weigh in at more than 50 pounds, lowering the threshold for additional handling fees down from 70 pounds.
Fedex's fee increase will start on Jan. 6, while the UPS price hike started on Dec. 29.
"These changes will ensure that we continue to provide the level of service that our customers expect while responsibly managing capacity through our network," a FedEx spokeswoman said according to The Journal.
The fee change means that the companies will make more money when consumers order items like televisions and furniture. Online shopping for such big-ticket items is becoming the new normal.
UPS said its prices will rise 4.9 percent on average as of Sunday.
The fee increase comes as companies like FedEx fight against e-commerce giant Amazon. FedEx promised to lap Amazon in 2021 during its quarterly earnings call earlier in December.
"If you think about all the positive things we've said and that we're seeing, as we get into 2021, we will start lapping Amazon," executive Alan Graf said. "We will have a lot more of the sixth and seventh day on our belt and we're going to be delivering millions of packages on Sunday for the rest of this fiscal year rolling into 2021."