FedEx introduces 2021 rate increases

Memphis-based global freight transportation and logistics services provider FedEx said this week that its shipping rates are set to head up, effective January 4, 2021.

Company officials said that these coming rate increases will “enable FedEx to continue investing in service enhancement, fleet maintenance, technology innovations and other areas to serve customers more effectively and efficiently.”

For FedEx Express, the company said shipping rates will head up by an average of 4.9%, for its U.S. domestic, U.S. export, and U.S. import services. And rates for FedEx Ground and FedEx Home Delivery will also go up by an average of 4.9% with FedEx SmartPost and shipping rates also going up, but the company did not provide specifics.

The company also said that its list of delivery area surcharge U.S. ZIP codes for FedEx Express, FedEx Ground, and FedEx SmartPost are also set to change, beginning on January 4, 2021.

What’s more, FedEx said that, effective January 21, it will begin charging a 6% late fee to U.S. FedEx Express and FedEx Ground customers that do not pay invoices within their agreed upon payment terms.

And beginning on January 18, 2021, it said that the following FedEx Express, FedEx Ground, and FedEx Freight surcharges will go into effect:

• there will be changes to how Additional Handling Surcharge is assessed for FedEx Express and FedEx Ground packages, with a surcharge applying to any package that measures greater than 48 inches along its longest side and measures greater than 30 inches along its second-longest side and has an actual weight greater than 50 pounds, for FedEx U.S. Express Package Services and U.S. Ground Services or an actual weight greater than 70 pounds for FedEx International Express Package Services and International Ground Services;
• effective January 18, 2021, a surcharge will be applied to any Express and Ground package greater than 105 inches in length and girth;
• FedEx Freight will introduce a High Cost Service Area Surcharge that applies to certain shipments;
• certain U.S. locations will be assessed an International Out-of-Delivery-Area Surcharge or an International Out-of-Pickup-Area Surcharge for FedEx International Express Freight services; and
• FedEx Freight rates will increase by an average of 5.9%, applicable to the FXF 100, FXF 501, Offshore (includes FXF 300, FXF 303 FXF 352 and FXF 370 series) and commodity rates (includes pallet, volume, or truckload), among others 

Rob Martinez, president and CEO of San Diego-based Shipware, told LM that FedEx has presented what he described as a significant list of changes and rate hikes.

“[It is] indicative of the fact that the demand for parcel delivery services through the Covid-19 pandemic currently exceeds the supply,” he said. “The ‘average’ of 4.9% sounds rather mundane, once again, it’s double the average annual inflation (2.46% 1990 through the end of 2018), and nearly triple 2019’s 1.81%.”   

And he also noted that his firm is also not surprised by continued changes to the Additional Handling Service (AHS) surcharge, as both FedEx and UPS have continued to increase fees for larger packages that don’t easily fit within its conveyance system.

As for the new 6% fee for the outstanding balance when invoices are not paid within terms, he explained that FedEx joins UPS that has long imposed a Late Fee. 

“It becomes even more important for shippers to utilize freight audit and payment providers to avoid unnecessary late payment fees,” noted Martinez.