June 7 2011 07:21 PM

Jerry Hempstead, a parcel industry expert, notes that, "Effective Monday, June 6, the air fuel surcharge for FedEx will be 16.5% for those companies that have not negotiated a reduction or waiver of fuel. For the first time that I can remember FedEx and UPS will not have the same air fuel surcharge. UPS will be charging 16%.

Shippers must keep in mind that FedEx and UPS do not have matching base rates for air services with UPS being generally less expensive than those published for comparable services with FedEx. Therefore its impossible to easily compare the value of "percentage off" discount offers, when both base tariff and fuel are not equal.

One may think that say 50% off of FedEx is a better value proposition than a 45% discount from UPS but that may not be true when you compute the net rate one has to pay the carrier to transport a package.

I have been keeping a running history of fuel surcharges for years and this difference should be noted as it's historic.
Rising costs of fuel are impacting every business and increasing the cost of raw materials coming in and finished product going to consumers.

PARCEL has and will continue to provide information and strategies to assist shippers in understanding and controlling transportation costs."

Jerry Hempstead
hempsteadconsulting.com 407 342 3825