Market News

FedEx Adding Temporary Surcharges As Covid-19 Pressures Mount

Starting June 8, FedEx (FDX) has announced that it will start implementing a number of surcharges, including a temporary surcharge on FedEx SmartPost packages of $0.4/ package, as it deals with the fallout from Covid-19.

For customers at the enterprise level, U.S. domestic residential FedEx Express and FedEx Ground packageswill face a surcharge of $0.3/ package, while Oversize U.S. domestic FedEx Express and FedEx Ground packages will now need to cough up an extra $30/ package.

“As the impact of the virus continues to generate a surge in residential deliveries and has also generated a surge in oversize, hard-to-handle packages, we have experienced increased operating costs across our network” the company explained.

“To continue providing our customers with strong levels of service during this time, we are implementing temporary peak surcharges” FedEx stated, arguing that it provides an essential business keeping commerce moving and delivering critical shipments during this challenging time.

Indeed, FedEx rival UPS (UPS) has already implemented peak surcharges on certain U.S. domestic packages starting from May 31, and effective until further notice. “Our goal is to ensure businesses and customers are able to meet their shipping needs while demand has increased for shipping services” the company explained at the time.

A $0.30 peak surcharge now applies to certain UPS Ground Residential and UPS SurePost packages if customer’s (like Amazon, Best Buy and Target) average weekly volume exceeds 25,000 packages.

Shares in FedEx are currently trading down 9% year-to-date. Analysts have a cautiously optimistic Moderate Buy consensus on the stock, with 10 recent buy ratings offset by 8 hold ratings. More worryingly, the average analyst price target of $135 indicates 2% downside potential from current levels. (See FDX stock analysis on TipRanks).

Morgan Stanley’s Ravi Shanker has just reiterated his hold rating on FedEx, citing unprecedented pressures from Covid-19 including sharp declines in B2B and International volumes, elevated costs and one fewer working day.

Related News:
Zoom Lifts Full-Year Sales Guidance As Quarterly Revenue Balloons 169%
Billionaire Ackman Exits Berkshire Hathaway, Blackstone To Fund Opportunities
Amazon Leases 12 Boeing Cargo Aircraft To Meet Online Orders Surge

Tired of arriving late to the Big Returns Party?​
Most investors don’t have major gainers like TSLA or NVDA on their radar from the start.
The profusion of opinions on social media and financial blogs makes it impossible to distinguish between real growth potential and pure hype.
​​For the past decade, we have developed and perfected technology designed to help private investors, just like you, find the best opportunities, with the greatest upside potential, in any financial climate.​
Learn More

Latest News Feed