How Will FedEx’s Rate Increase Impact Your Shipping Costs?

Spend Matters welcomes another guest post from NPI, a spend management consultancy, focused on delivering savings in the areas of IT, telecom and transportation.

Last week, FedEx announced its 2013 annual rate increases for domestic and international Express shipments. FedEx's general rate increases mirror last year's with an overall increase of 5.9 percent less a 2 percent fuel surcharge reduction for a net increase of 3.9 percent.

But, FedEx's recent rate hike proves that not all are created equal. Shippers should expect a larger jump in shipping costs than they did in 2012.

Depending on your service level and shipping zone, many shippers will see increases as high as 10.5 percent. With more cost-conscious shippers using lower cost services, FedEx has placed higher rate increases on economy services and lower rate increases on premium services.

Additional rate increases include:

  • Address correction rates will increase by about 9 percent
  • Declared value charges for items above $100 in value will increase 6.25 percent
  • Delivery area surcharges have all risen sharply - residential shipments will rise by 8.3 percent; commercial will rise by 7.5 percent
  • Residential delivery charges rise 6.6 percent

These rates will go into effect on January 7, 2013, giving shippers only a few short months to figure out how to negate these cost increases and protect their shipping budgets. What changes will you make to your shipping practices in anticipation of these new rates?

- NPI

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