The surcharge drives the cost of shipping goods within Canada higher, topping 40 percent for some carriers. For online stores with high returns, such as apparel and footwear companies, increased shipping costs can be especially difficult. So far, most companies are trying to absorb the extra domestic shipping charges, said Retail Council of Canada spokeswoman Michelle Wasylyshen.
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With inflation squeezing consumers and the ongoing battle for online dollars, he said retailers are reluctant to pass on costs. Story continues below ad “Retail is one of the most competitive industries in Canada, so raising free shipping minimums or directly adding surcharges to consumers is often done as a last resort,” he said. “Retailers would rather find savings elsewhere.” The higher domestic shipping costs come as international shipping costs are finally starting to stabilize. Retailers have essentially traded more reasonable international container shipping rates for higher shipments within Canada, experts say. “The idea that we’re always in the balance around fuel prices or containers or what’s happening with global supply chains is long gone,” said the president of Indigo Books & Music Inc. Peter Ruis in an interview. Indigo, which has seen online sales soar during the pandemic, is also avoiding raising prices despite soaring shipping rates. “We’re absolutely clear that especially right now with inflation and how customers are feeling … we’re not going to want to raise prices,” Ruis said. Instead, the company is focusing on developing the ability to ship from local stores, rather than a central warehouse, to reduce shipping costs. Trending Stories
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“In October we’re launching our new website, which will have a ship from store, which means we can use all of our stores as a warehouse for the online consumer,” Ruis said. “If someone is in Halifax, we might choose to ship product to them from the Halifax store rather than the hub (distribution center) in Toronto or Calgary.” Story continues below ad He added: “In a situation where fuel charges are really difficult, we can mitigate that by sending stock locally.” 0:40 Tips to save gas Tips to save gas Apparel retailers, which often see the highest return volumes among retailers, also appear determined to avoid passing on fuel surcharges. Canadian underwear and apparel brand Knix Wear Inc., which does most of its sales online and offers free return shipping on most orders, said it has no plans to change its eligibility threshold for free shipping. “We know there are a number of external factors that affect shipping and costs, but we don’t want our customers to feel those impacts,” said company spokeswoman Emily Scarlett. Shipping charges vary between different courier companies. A FedEx spokesman said the shipping company manages fluctuations in fuel prices through “dynamic fuel surcharges.” Story continues below ad Fuel surcharges on shipments within Canada are subject to weekly adjustments based on the rounded average Canadian retail diesel price per litre, James Anderson said in an email.
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For out-of-country packages, the company bases the fuel surcharge on a rounded average of the U.S. Gulf Coast spot price for a gallon of kerosene jet fuel, he said. The FedEx Express fuel surcharge is currently 41.50 percent within Canada and 26.50 percent on international shipments. DHL Express said it applies the fuel surcharge to compensate for fluctuations in fuel prices, which can affect the cost of transportation services _particularly for the company’s aviation fleet. The fuel surcharge for international shipments is set at 25% for July 2022, according to the company’s website. Canada Post’s fuel surcharge for domestic service is currently 37 per cent, while international parcel service is 21.75 per cent, according to its website. © 2022 The Canadian Press
