Changes Coming to the FedEx Additional Handling Surcharge

April 28, 2016 at 1:36 PMLeah Palnik

FedEx currently applies an additional handling surcharge to packages with a length greater than 60 inches, but after June 1 the threshold will be lowered to 48 inches. This announcement came during the FedEx third-quarter earnings call and is in response to recent e-commerce trends. More consumers are shopping online, which has led to an increase in home deliveries and an increase in non-traditional items being shipped, such as big screen TVs, mattresses, and swing sets.

The additional handling surcharge currently costs $10.50 per package, so it’s important to take a look at the size of packages you send and receive. If a lot of your packages are greater than 48 inches in length, you will see a significant jump in your costs.

It’s also important to note some of the other criteria from the FedEx service guide that would cause a package to be charged the additional handling surcharge. This surcharge also applies to any Express or Ground package that: 

  • measures greater than 30 inches along its second-longest side
  • has an actual weight of greater than 70 lbs
  • is not fully encased in an outer shipping container
  • is encased in an outer shipping container made of metal or wood
  • is cylindrical, including (without limitation) cans, buckets, barrels, drums or pails that are not fully encased in an outer shipping container made of corrugated cardboard

The rise of e-commerce has caused a considerable amount of change in small package shipping in the past few years. Carriers are constantly adjusting service costs to address market trends. In 2015, FedEx and UPS began applying DIM weight pricing to all ground shipments as opposed to just those three cubic feet or larger. Prior to the 2016 rate increases and just in time for the holiday volume, the charge for oversized packages nearly doubled to $110. In addition, UPS instituted a 2.5% surcharge for third party billing service in response to the growing popularity of drop shipping. As the e-commerce sector continues to thrive we can expect to see more changes like this in the future.

Update: On May 6, 2016 UPS announced it will follow suit with FedEx and reduce its maximum length for the Additional Handling charge. Effective June 6, 2016, UPS Ground packages exceeding a length of 48 inches will be assessed the fee.  

It's important to start evaluating how you these changes will affect your shipping costs. Through a PartnerShip-managed shipping program, you receive significant discounts on select FedEx services - resulting in savings that can help to offset cost increases like these. If you're not sure if you qualify for one of our small package shipping programs contact us and we'll find the solution that's right for you.

A Brief History of the Interstate Highway System

April 21, 2016 at 7:38 AMPartnerShip
Brief History of the Interstate Highway Blog PostDid you know that the interstate highway system our trucking industry depends on began its life as the “Interstate and Defense Highway System?” We’ll explain the “defense” aspect soon, but first, a bit of history. 

In the 1920s, automobiles became more affordable, more families were traveling and moving, and motor truck traffic was increasing as the economy grew and the country expanded. Before the federal government passed “The Federal Aid Highway Act of 1925,” many of the country’s 250 or so highways carried names such as “The Lincoln Highway” or “The Dixie Highway.” The new system would use the now-familiar shield and uniform numbers for interstate highways.

But more drivers needed more roads. Who would pay for them? Other transportation systems (streetcars, subways, elevated trains) were usually built and operated by private companies that made infrastructural investments in exchange for long-term profits. Transportation interests, such as car manufacturers, tire makers, gasoline refiners and service station owners, suburban developers, and trucking companies, began to convince state and local governments that roads were an important public concern.

Now, back to the “defense” part of the highway system. The man who would become president in 1953, former Army General Dwight D. Eisenhower, was stationed in Germany during World War II and had been impressed by its network of high-speed roads known as the Reichsautobahnen. After he became president, Eisenhower made it a priority to build a highway system that would help connect the nation and provide key ground transport routes for military supplies and troop deployments in case of an emergency or foreign invasion. When the highway system was introduced, it was simply known as "the National Defense Highway System."

The “Federal-Aid Highway Act” passed in June 1956 authorized the construction of a 41,000-mile network of interstate highways and allocated $26 billion to pay for them. The federal government would pay 90 percent of the cost of construction with the states picking up the remaining 10 percent.

A promotional piece from 1961 claims the new highway system will: “Build up depressed areas. Strengthen our National Defense. Bring in industry. Provide jobs. Improve land values.”

So next time you’re on I-10 on the west coast, I-95 on the east coast, or traveling through the heartland on I-80, remember that the Interstate Highway System we depend on for commerce and travel was created with national defense in mind.