FedEx Freight Limits Fuel Surcharge

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FedEx Freight, a subsidiary of FedEx Corp., said yesterday it will limit its standard fuel surcharge in order to benefit customers hit by volatile fuel prices in the aftermath of Hurricane Katrina.

FedEx Freight, Memphis, TN, is a leading provider of regional next-day and second-day and interregional less-than-truckload freight services.

The company's fuel surcharge, which is updated weekly, will not exceed the most current pre-hurricane levels for the next 30 days.

"In our industry, the fuel surcharge is designed to manage normal supply and demand market forces of fuel, not temporary spikes caused by disasters," said Douglas G. Duncan, president/CEO of FedEx Freight.

The corporation has adopted a fuel surcharge calculation method for FedEx Express, FedEx Ground and FedEx Freight services based on the fuel prices published by the U.S. Department of Energy. The limit on the FedEx Freight fuel surcharge does not apply to the surcharges in place for FedEx Express and FedEx Ground.

FedEx Freight also is taking proactive steps to address rising fuel costs. FedEx operates one of the newest fleets in the industry and works with engine manufacturers, the Environmental Protection Agency and the U.S. Department of Transportation, the corporation said.

Meanwhile, UPS announced plans to raise its cap to 12.5 percent on the fuel surcharge applied to UPS Next Day Air, UPS 2nd Day Air and UPS 3 Day Select and its international air services beginning Oct. 3.

The surcharge continues to be calculated from an index based on the average price for a gallon of kerosene-type jet fuel and remains the lowest among major air express carriers, even with the new cap.

A fuel surcharge on UPS Ground services is unaffected and continues to fluctuate monthly based on the Energy Department's On-Highway Diesel price. It will stand at 3 percent in September.

UPS introduced a 9.5 percent cap on the fuel surcharge for its premium air services this past January after prices began advancing rapidly toward the end of 2004. Since then, jet fuel prices have increased more than 60 percent.

Melissa Campanelli covers postal news, CRM and database marketing for DM News and To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting

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