Christmas in July? FedEx Rolls Out Peak-Season Surcharges

Not feeling very merry about the return of peak-season demand surcharges for 2025, which were announced by FedEx earlier this month? We don’t blame you.  

Not only did the 2025 announcement come early — the carrier announced its surcharges on August 15 last year — but FedEx, which typically follows UPS guidance, has taken the lead the last two years. We don’t expect to see UPS announce its own peak-season rate increases until its Q2 earnings call on July 29. But they should mirror the updated rates from FedEx. 

That’s not good news for peak-season shippers. Because the new fees represent a bigger rate increase than we saw last summer. Here’s what you have to look forward to: 

• Beginning on September 29, new fees will be added for U.S. domestic packages that require additional handling, are oversized, or are unauthorized. The surcharges start at $8.25 for special handling, and they max out at $545 for unauthorized packages that exceed FedEx size and weight restrictions. 

• On October 27, three more fees will be added, covering overnight, two-day, express saver, residential, home delivery and ground economy shipments.

• That same day, FedEx will also apply new residential delivery charges for higher-volume shippers that see a jump in shipping activity — which it calls a “peaking factor.” 

Like Santa’s naughty-or-nice list, the impact of the carrier’s holiday surcharges only grows as we approach Christmas, with prices peaking between November 24 and December 28. The FedEx demand surcharges are currently stated to remain in effect until January 18, 2026, just in time for FedEx’s inevitable general rate increase (GRI) to kick in for the new year. 

Given the cadence and predictability of FedEx and UPS price increases, it actually feels more like Groundhog Day than Christmas right now.  

According to FedEx, the demand surcharges are based on tightened capacity, elevated volumes and rising operating costs. In its March earnings call, the carrier said it picked up 24 million packages on Cyber Monday 2024, 70% more than on an average day. 

Whatever the reason, the new FedEx charges are aggressive, and the announcement came early this year. The silver lining is that now smart shippers have even more time to study the rate schedule and prepare, well before it begins to look a lot like Christmas. 

Plan Now for a Profitable Peak Season  

Remember just a month ago, when FedEx announced new rate changes, along with a new pricing and rating structure for parcel pickups? It’s nearly impossible to keep up with all the carrier announcements, understand them, and make informed decisions about your own shipping plans. Whatever time of the year it is, there’s always some new rate increase or surcharge looming. 

That’s where Redwood comes in. Every day, our Parcel Advisory team helps customers translate complicated carrier rate schedules and surcharges into profitable shipping plans that make good business sense. You don’t have to invest in internal resources or in-house expertise to optimize your use of FedEx, UPS, and other carriers. It’s the job of our Parcel experts — including former FedEx and UPS employees — to navigate the complexity and help you develop smart shipping plans that balance rising costs with customer satisfaction. 

As the holidays approach, you can rely on Redwood’s Parcel Advisory team to study carrier rates, your own shipping frequencies and patterns, your typical parcel sizes and weights, your service needs, your peak-season volumes, and other factors. Then our experts arrive at a profitable plan for peak season and beyond, adjusting your carrier and service mix — as well as coaching your team for successful carrier negotiation.  

Remember that, while FedEx seems to be punishing high-volume holiday shippers, they also need your business. Redwood’s Parcel team can help you achieve favorable rates and sign new contracts that deliver real savings.   

The Redwood Parcel team typically saves shippers 12% in the first year alone. That sounds like a nice holiday gift for your executives and shareholders.  

Don’t wait until the leaves fall or the snowflakes fly. Get ahead of the holiday rush by contacting Redwood today.