January 4, 2002
FedEx, United Parcel Service and Airborne Express are ringing in the new year with whopping increases in a number of add-on fees that will add as much as 40 percent to some deliveries. Hardest hit will be online and catalog merchants, who will lose no time passing the charges on to consumers.
All three carriers have introduced new fees ranging from $1.10 to $1.35 for making deliveries to residential addresses. UPS and Airborne are also catching up with FedEx by imposing a separate fee for air shipments to addresses that they consider out of the way.
All of the carriers have been steadily raising their base rates as well, partly to make up for declining business as the economy slows. Also, although none will admit it, the higher rates for shipments to individuals help offset the whopping discounts the carriers give to large corporate clients.
There are plenty of other new add-on or "accessorial" fees, including a fee for using a certain type of preprinted return label and another fee for using the wrong kind of label. Existing add-on fees -- for hazardous shipments, for example -- are also being raised.
The freight companies say they're not trying to gouge consumers, merely trying to recover the supposedly higher costs of delivering to residential addresses, which they claim tend to be more widely dispersed than offices and businesses. Also, if the consumer is not home to accept the delivery, the driver must return a second time, a freight company spokesman said.
The alternative? The U.S. Postal Service, which is generally the lowest-priced carrier for individual consumers. While the USPS lacks some of the delivery guarantees and fancy online tracking capabilities, its service is roughly comparable to the big three and it has many more drop-off locations.
