Effective September 10, 2018, FedEx is increasing its Fuel Surcharge (FSC) Index Table. The new FedEx table will eliminate all of the previously held FSC advantage over UPS. This is important since FedEx has demonstrated a significant FSC advantage over UPS for nearly 2 years.
You can read the complete announcement – here.
In summary:
The fuel surcharge percentage for FedEx Express® services is subject to weekly adjustment based on the weekly published U.S. Gulf Coast (USGC) spot price for a gallon of kerosene-type jet fuel.
The fuel surcharge percentage for FedEx Ground® services is subject to weekly adjustment based on the weekly published national U.S. on-highway average price for a gallon of diesel fuel.
Implications
Under the new table, Domestic Express, Exports, and Imports will have separate indexes. And with the changes FedEx is making, it will be eliminating its sizeable fuel surcharge advantage over UPS.
For example, Ground shipping which previously had a 16% advantage over UPS, now has none. Same with Domestic Express, which has dropped from a 14% advantage to 0%. Even Exports and Imports are losing their 40% and 65% advantages (respectively).
Now, FedEx fuel fees are in-line with those of UPS, indicating that FedEx feels confident in its market position and making these increases will not hurt the business. This change is possibly in response to an opportunity the carrier feels it has in light of other fees UPS has recently imposed, but FedEx has not, such as what we’ve written about here.
The next telling move by both carriers will be their 2019 GRI announcements which we can expect very soon. Stay tuned.
