Surcharges on Canadian companies using Amazon now in effect

Canadian companies using Amazon to pick, pack, and ship goods will begin paying a new surcharge Friday due to rising fuel costs.

The e-commerce giant says the 3.5 per cent surcharge on fulfilment fees has gone into effect due to the need to offset costs.

Karl Littler, senior vice-president of public affairs with the Retail Council of Canada, says Amazon won’t be the only company putting in these types of price hikes.

“Unless they’re manufactured in Canada or let’s say North America, a lot of the fuel impact is going to be in their shipment across the Pacific or shipment at great distance,” said Littler.

“And that’ll be true whether it’s for an e-commerce warehouse in Canada or a retailer on Main Street.”

Littler says businesses all over the world are feeling the pinch as they try to navigate the rising costs of moving goods from A to B.

“In any business situation, maybe the cost of buying a product or the cost of goods, like the cost to the retailer of obtaining the good to then sell on to the consumer, if it goes up, in general, it’s going to create an upward pressure on prices,” he said.

Littler says passing on costs to consumers is unavoidable because they can’t absorb costs themselves and stay in business at the same time.

“You can’t absorb a whole lot of big fuel price hits on that kind of margin,” he said.

“But I don’t think it’s unique to e-commerce…I know from talking to our members that this is affecting all members of all stripes, you know, whether that’s in-store or e-commerce or any permutation. So, there’s nothing unique about this as far as e-commerce goes.”

Amazon says up until now, they were absorbing price increases, but the surcharge is now necessary to partially recover some elevated fuel and logistics costs.

–With files from Dean Recksiedler and The Canadian Press