According to a company memo seen by Reuters and The Wall Street Journal, retail giant Walmart Inc. will begin to charge extra fees to some of its suppliers to transport goods to its warehouses and stores in response to rising fuel and transportation costs.
Reuters and the WSJ report that the memo from Walmart’s chief merchandising officer and chief operating officer for Walmart U.S. said that the company will impose a “collect pickup charge” calculated as a percentage of the cost of goods received and a fuel surcharge based on the cost of fuel to transport the goods.
In June, Walmart’s U.S. CEO John Furner said the company would need to pass on the costs of higher fuel or shipping to “to fairly price and protect the margins where appropriate.”
The news outlets added that this move comes more than a month after Walmart, the nation’s largest retailer, cut its full-year profit outlook, blaming rising costs of labor and fuel. Fuel costs, in particular, ran over $160 million higher than the company had anticipated.
The Wall Street Journal first reported on the details of the memo, which was addressed to Walmart’s “Valued Collect Suppliers”
“This program is a result of Walmart adapting to the significant transformation and increased costs seen in the transportation industry over the past few years,” the memo read. “The changes outlined… allow us to share cost accountability with our Collect suppliers, helping to enable us to meet our everyday low price commitment to our customers.”
John Furner added that some suppliers are responding positively to Walmart’s efforts.