FedEx preparing “dynamic pricing” for better profit during peak season
With so much loss in package volume this year, FedEx is strategizing to maximize its efforts and make as much money as possible from every single delivery. FedEx Express reported a daily volume drop of 14% in the most recent quarter. However, with this company’s ability to adjust surcharges, they absorbed $150 million in profit over last year’s peak season.
The dynamic pricing that FedEx is utilizing changes the surcharge based on individual’s weekly peak factors. This means that the parcel delivery company will track how many extra packages a customer has been shipping compared to a different time of year. The extra shipping behavior is likely to occur around Christmas, which means surcharge fees increase the closer to the holiday season that an individual or company ships goods. In addition to these standard surcharges, FedEx may also apply dynamic surcharges that are adjusted based on market conditions or other factors. For example, during periods of high demand or when shipping to certain areas is more difficult, FedEx may adjust its surcharges accordingly to reflect the additional costs of providing shipping services under these conditions. FedEx's surcharge dynamic pricing is designed to allow the company to adjust its prices based on the specific circumstances of each shipment, ensuring that it can cover its costs while providing reliable and efficient shipping services to its customers.
FedEx and UPS have introduced Delivery Area Surcharges (DAS) in 82 additional ZIP codes across the US, covering nearly 1% of the population.