There was talk back in December about FedEx increasing their current fuel surcharge rates and this has just been confirmed.
FedEx has missed out on fuel surcharge revenue in comparison to UPS for the past two years. In an effort to level the playing field FedEx announced fuel surcharge rates for FedEx Express and International will increase as much as 4% and FedEx Ground will go up as much as 3.5%.
This news comes days after new rate increases and new dim weight rule changes went into effect for 2015. Shippers are finding it very hard to swallow this increase given the ever falling fuel rates. How can a carrier justify increasing fuel surcharge rates when fuel prices are the lowest in several years?
UPS hedged fuel in November 2012 when they set their fuel surcharge tables which would charge a higher fuel surcharge rate should fuel prices drop, but show an advantage over FedEx should fuel prices rise substantially. FedEx is merely raising their fuel surcharge rates to align their rates more closely to what UPS is charging while still maintaining a slight edge over UPS to retain current clients. Even though FedEx will still have an advantage over UPS while increasing profits this bad news for shippers, but great news for share holders.
The new fuel surcharge table can be viewed at http://www.fedex.com/us/services/fuelsurcharge-2015.html.
Please contact us for additional information or to get an analysis on how these increases will effect your pricing for 2015. We can also provide a comparison of rates to that of UPS.
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Rick R.
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