FedEx Boosts Rates, Lowers Fuel Surcharges

FedEx to increase rates, lower fuel surcharge

Effective January 3 next year, Memphis-based FedEx is raising rates across the board for its Express and Ground operations, but plans to lower fuel surcharges in some cases.

FedEx Express package and freight rates are going up by an average of 4.6% for U.S. domestic and export services, while its fuel surcharge is dropping by 2% -- resulting in a net average shipping cost increase of 2.6%.

Currently, a 0.5% fuel surcharge is triggered when the price of a gallon of kerosene-type jet fuel hits 52 cents per gallon and rises 0.5% each time that price increases 4 cents per gallon above a 54 cent per gallon floor. Under the new adjusted surcharge, FedEx said it would raise the trigger price for the surcharge to 66 cents per gallon, which reduces the surcharge levels by 2%.

Rates for FedEx Ground and FedEx Home Delivery are going up an average of 2.9%, with the addition of an indexed fuel surcharge for both U.S. and international FedEx Ground shipments.

The company added that delivery area surcharges assessed for FedEx Express shipments destined for locations in select ZIP codes is going up by 25 cents per package, with delivery area surcharges for residential and commercial locations rising to $2 and $1.25 per package, respectively.

Also, surcharges for residential delivery will increase from $1.75 to $2 per package for FedEx Express shipments, from $1.75 to $2 per package for FedEx Ground shipments and from $1.40 to $1.50 per package for FedEx Home Delivery shipments.

Finally, for FedEx Ground shipments, charges for declared value over $100 will increase from 35 to 40 cents per $100 and the maximum declared value for a ground package will increase from $25,000 to $50,000 per package. A minimum charge of $1.20 will be implemented for packages with a declared value between $100 and $300, FedEx said.

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