From the Shipageddon forecasted back in August to the Returnageddon reported last month – mail and package deliveries continue to experience a historic surge.
As a result, Memphis Tennessee-based courier, FedEx, will start charging its largest customers an extra 30 cents per order beginning February 15.
A surge in online shopping since the start of COVID-19 is the most apparent reason for the extra charges. The post-holiday shopping and return season, as well as higher pandemic related costs, are additional factors.
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And as Global Digital Shopping Index found that “56.1% of consumers regard free shipping for digital orders as an important feature,” – it’s clear why we see more returns than ever and how it adds to the loads.
Shipping that’s both free and fast is certainly not cheap or low-cost, and while more prominent retailers might have an easier time handling the costs, smaller ones are likely to struggle.
“The impact of the virus continues to generate elevated volumes, and we continue to experience high demand for capacity,” FedEx said.
The newly added charge will allow FedEx “to continue providing our customers with the best possible service.”
UPS has also raised prices since the pandemic shifted consumer shopping behavior, and more and more continue to shop online rather than risk stepping into stores.
Detroit News reported that in order to keep workers safe and handle an influx of residential deliveries, both couriers face new expenses.
Over in the EU, one of the largest eCommerce companies, Zalando, has begun charging a “distance fee” for packages coming from further afield.
“We have expanded our range, and the additional supply gets stored in logistics centers that are further away. For those items, we charge 3.90 euros,” said the company’s spokesperson.
In 2021, eCommerce won’t be dying down either as 67% of Americans plan to do more online shopping (e.g., groceries, household items, clothing, gifts) this year in comparison to last.
Every brand must already have a plan on how to increase its customers’ lifetime value to cover the increasing shipping costs and the demand for free returns.