Amazon (AMZN) is drawing criticism in Canada after the e-commerce giant introduced a new fuel surcharge for Canadian companies that use its services to pick, pack and ship goods.
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Trade AMZN with leverageFor its part, Amazon says that the new fuel surcharge is necessary to help it offset rising costs, with crude oil trading above $90 a barrel. Management at Amazon said the 3.5% fuel surcharge on fulfillment fees will take effect in Canada starting on April 17.
However, the surcharge will only apply to Canadian companies that use its fulfilment program and will be charged to the business, not consumers buying or selling products on Amazon’s e-commerce platform. In a statement, Amazon said that the surcharge will help it partially recover some of the elevated fuel and logistics costs it is experiencing due to the war in Iran.
Canadians Upset at Amazon
Despite efforts to explain the rationale for the fuel surcharge, Amazon is being lambasted in Canada by corporate leaders and politicians who say the additional costs will hurt Canadian businesses at a time when they are already struggling with higher costs.
Like many countries, gas prices have soared across Canada in the wake of the Iran war, which has blocked the Strait of Hormuz, where 20% of the world’s crude oil is transported. At the same time, Canada is reeling from U.S. tariffs and a slowing economy. Amazon said that, until now, it had absorbed the higher fuel costs on its own, but that it is no longer able to do so.
Is AMZN Stock a Buy?
AMZN stock has a consensus Strong Buy rating among 46 Wall Street analysts. That rating is based on 43 Buy and three Hold recommendations issued in the last three months. The average AMZN price target of $284.09 implies 14.91% upside from current levels.
