FedEx’s breaks records:
FedEx has had a record-breaking December 2021- it brought in $250 M in surcharges during peak season despite having lighter volume. The company’s quarterly financial report shows that the revenue per package increased by almost 9%, due to surcharges included in the shipping rates. B2B Shipments are the number one focus of FedEx, which increased its revenue in December 2021.
FedEx took a ‘pull-forward’ approach where it encouraged shippers to send packages during the pre-holiday season in November in an attempt to improve ‘revenue quality’. B2B shipments are more profitable than home-delivery packages and while UPS, FedEx’s direct competitor, has a ‘Better, Not Bigger’ approach, FedEx claims to differentiate its strategy by catering to a wider customer base.
Surcharges are expected to stay high or rise due to the increased fuel expenses for the company starting in April.
Due to this, the customer is sandwiched between higher shipping rates and additional surcharges, especially since the pandemic.