YCD News – Recently FedEx Corp. said it will raise overall rates for most of its U.S. express and ground transportation services by 5.9 percent in 2024, which is down from a 6.9 percent increase in 2023. The move may be an attempt to take market share from rival UPS, which is facing sharply higher labor costs in the first year of a five-year contract with the Teamsters Union.
Meanwhile, FedEx has announced a 5.9% to 6.9% rate increase for its FedEx Freight LTL service within the U.S. and between the U.S. and Canada. FedEx said the exact rate increase will depend on the customer’s rate range. The rate increase for express services will affect domestic and international air service to and from the United States.
FedEx also said that rates for FedEx Economy, the company’s low-cost extended delivery service, will also increase. However, it did not provide a specific percentage at this time.
The increase will be effective January 1, 2024. general rate increases (GRIs) are the starting point for contract rate negotiations and dominate the parcel delivery industry, with GRIs often differing from what is ultimately paid after other rate adjustments as well as fuel or other transportation surcharges.
Additionally, FedEx has announced surcharges for peak season service. Beginning Oct. 9, the residential delivery surcharge will be assessed based on a shipper’s weekly shipment volume. From October 9 through January 14, the surcharge will be assessed on a three-week delayed basis after volume is calculated. Business customers shipping more than 20,000 residential and ground economy packages per week during any “count week” beginning October 9 will be assessed the surcharge.
For high-volume customers shipping with FedEx Express, the surcharge can be as high as $7.40 per package. For shippers with very high FedEx Ground volumes, the levy can be as high as $6.35 per package.
For FedEx Ground Economy service only, from Oct. 30 through Nov. 26, the surcharge will be $1.60 per package. From Nov. 27 through Dec. 10, the surcharge will rise to $2.60 per package, and from Dec. 11 through Jan. 11, the surcharge will drop back to $1.60 per package.
FedEx will also charge a $6.95 surcharge for extra handling services, a $73 per package surcharge for oversized shipments, and a $410 “unauthorized” package surcharge for ground delivery, which applies to shipments not designed to be shipped by parcel delivery and which FedEx has the right to refuse. All of these fees are higher than last year’s fees and are effective from October 2nd through January 14th.