Fuel Surcharges Give E-Commerce Firms More Reason To Be Creative About Logistics

This week, the Wall Street Journal reported that FedEx Corp FDX was planning to increase its fuel surcharge ahead of the holiday shopping season in an effort to boost their bottom line. The company's shipping costs will rise from about $67 to $170 for the transport of 100 shoeboxes, a significant blow to e-commerce firms that rely on fast delivery to please customers. United Parcel Service Inc UPS similarly raised prices in February, increasing its own cost to ship 100 shoeboxes to around $200. Retailers Cringe The increase has sparked outrage among retailers who rely on shipping companies to move their merchandise. Fuel prices have been on the decline this year, so many retailers say the surcharge is unnecessary. However, FedEx claims that their costs have risen despite the fall in oil prices as packages have become heavier and more abundant. Other Options While it's likely too late to make any changes to their supply chains before the holiday season begins, e-commerce firms have already begun to find new ways to cut out shippers like FedEx and UPS in order to lower their costs. Amazon.com Inc. AMZN recently began piloting a program in which customers can pick their packages up from local shops which have agreed to become delivery locations. Instead of paying a shipping firm to individually deliver each package, they are all dropped off at one location, like a local pharmacy, and customers pick them up. Another idea has been an Uber-like service in which Amazon customers sign up to deliver packages in exchange for payment.