FedEx will implement a 5.9% average general rate increase for its Express and Ground shipping services on Jan. 1, 2024, the delivery giant said Tuesday.
Rates will increase by 5.9% on average for FedEx Express' U.S. domestic, U.S. export and U.S. import services, along with FedEx Ground and FedEx Home Delivery. The company added that Ground Economy shipping rates will also increase.
FedEx Freight shipping rates will jump between 5.9% to 6.9% on average depending on the customer's transportation rate scale for shipments within the U.S. and between the contiguous U.S. and Canada, the company said.
"The price adjustments reflect incremental costs associated with the current operating environment, while enabling FedEx to continue investing in service enhancement, fleet maintenance, technology innovations, and other areas to serve customers more effectively and efficiently," FedEx said.
FedEx said details of all its rate, surcharge and fee changes will be available on its website on Sept. 7.
The rate hike, a yearly fixture for the company and rival UPS, represents a decline from the 6.9% increase FedEx implemented at the start of this year as shipping demand continues to decline from pandemic-driven heights.
UPS has not yet announced its annual rate increase, but the company typically matches FedEx's hikes with its competing services. Although UPS may want to pass off higher labor costs from its new International Brotherhood of Teamsters contract to shippers, it will have trouble doing so in a softer demand environment for parcel carriers, experts have told Supply Chain Dive.
"This is the earliest [general rate increase] announcement, and likely a preemptive strike by FedEx that puts pressure on UPS as it comes out of the Teamsters negotiation," said Paul Yaussy, a senior consultant of professional services at Shipware, in a LinkedIn post.