By 24/7 Staff / www.supplychain247.com / November 5th, 2018
The Memphis-based company announced it would raise rates by an average of 4.9% as of January 7, 2019, matching the increase that FedEx put in place at the start of 2018.
FedEx Increasing Shipping Rates
FedEx Express, FedEx Ground and FedEx Freight, subsidiaries of FedEx Corp., will increase shipping rates effective January 7, 2019.
FedEx Express shipping rates will increase by an average of 4.9% for U.S. domestic, U.S. export and U.S. import services.
FedEx Ground and FedEx Home Delivery shipping rates will increase by an average of 4.9%. FedEx SmartPost shipping rates will also increase.
FedEx Freight shipping rates will increase by an average of 5.9%.
This rate change applies to eligible FedEx Freight shipments within the U.S. (including Alaska, Hawaii, Puerto Rico, and the U.S. Virgin Islands), between the contiguous U.S. and Canada, within Canada, between the contiguous U.S. and Mexico, and within Mexico.
But the US Postal Service has proposed increasing its rates for Priority Mail boxes by an average of 5.9%.
The Postal Service wants the rate hikes to take effect in January, but the government hasn't yet ruled on the proposal.
Higher Fuel Prices Causing Higher Costs
FedEx reported that in the quarter ending in August, its fuel costs were 40% higher than a year earlier, and labor costs were up 11%.
The increased price of jet fuel alone increased its costs by more than $200 million in the quarter.
But FedEx has been able to capture some of those increased fuel costs through a separate fuel surcharge it has in place for some shippers.
A shortage of truck drivers has driven up labor costs as well. FedEx and its competitors are struggling to keep up with increased demand for their services.
Growth of Ecommerce
FedEx has said it expects the four Mondays during the upcoming holiday shopping season will be the four busiest days in the company's history.
At the same time, companies such as FedEx and UPS are facing increased competition from Amazon (AMZN) itself, which is starting its own delivery service using contract workers to handle package deliveries.
Details of all changes to rates and surcharges are available at FedEx Shipping Rates.
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