Analysts: FedEx Surcharge a Mistake
Securities analysts said that Federal Express Corp. made a mistake in implementing a fuel surcharge and would have been better off to increase list prices, as United Parcel Service did.
Bear Stearns, an investment and brokerage firm based in New York, surveyed customer reaction to the actions of both companies and found customers “more accepting” of the UPS increase.
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FedEx announced a surcharge of 3% on Dec. 31. On Dec. 29, UPS announced a 3.1% increase in its ground package rates (1-10, p. 3).
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According to Bear Stearns, “some shippers who intend to pay the fuel surcharge have even indicated that they would take the fuel surcharge back if fuel costs came down again.”
