Peak Surcharges are the New Normal for FedEx
E-commerce sales soared and surcharges spiked as COVID-19 kept consumers at home. Although they were originally labeled as “temporary,” it turns out those peak surcharges from UPS and FedEx might be here to stay.. FedEx Chief Marketing and Communications Officer Brie Carere told analysts that the surcharges are “the new normal,” according to Supply Chain Dive.
Residential deliveries made up 72% of FedEx’s total volume last quarter – up 16% from the previous year. FedEx CFO Alan Graf stated, “I don’t know anybody’s making margins in Ground like we are, not even close.”
Surcharges are anticipated to be even higher in November and December as holiday volume comes into play.
Logistics Industry Reports High Growth Levels
In June, the logistics industry reported the highest growth levels since late 2018 according to an analysis from Logistics Managers’ Index (LMI). Last month’s LMI score of 61.7 jumped more than 10 points from April’s all-time low”, according to Supply Chain Brain.
The combination of a surge in retail on-hand and high levels of stock are driving inventory metrics and premiums on warehousing space.The inventory and warehousing readings are consistent, while Transportation doubled in digits with its comeback in June.