Due to rising costs, FedEx says it will raise shipping rates and add surcharges

FedEx has announced it will increase package prices in 2022, along with new or rising surcharges, according to reports.

Effective Jan. 3, the company will increase charges for domestic import and export services in the U.S. by an average of 5.9 percent, an increase that will also apply to Canada and Mexico.

The rate increase includes shipments sent via FedEx Express, FedEx Ground and FedEx Freight, while prices for Ground Economy will also increase.

Ground Economy was formerly the USPS SmartPost service, used to provide the last mile section of the service, then FedEx management decided to move it to their own distribution network to improve traffic density. The company has not yet announced how much the general rates for this service will increase next year.

FedEx cited increased costs as the reason for the freight rate increase.

The company said, “These fees reflect the rising costs associated with a challenging operating environment while allowing FedEx to continue to invest in service improvements, fleet maintenance, technology innovation and other areas that will allow it to serve customers more effectively and efficiently.”

John Haber, CEO of package logistics consulting firm Spend Management Experts, noted that when FedEx reported its results for the quarter ended Aug. 31, it reported a $450 million increase in labor cost expenses for the quarter.

“The freight rate increase is not surprising, and 5.9 percent doesn’t tell the whole story,” John Haber said.

Shippers will start paying more when FedEx raises fuel surcharges on Nov. 1, and a series of new surcharges or surcharge mechanisms will hit shippers next January. Starting Jan. 17, a “no-tender” surcharge will be applied if the shipment is not ready when the FedEx driver arrives.

On the same day, a delivery or return surcharge will be imposed on packages shipped using FedEx Ground Economy service. In addition, an out-of-area surcharge will be applied to international shipments, based on postal code or location, in lieu of a fixed fee.

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