In advance of the 2014 General Price Increase, FedEx Express has announced a 3.9% average increase for US Domestic, US Export and US Import services, effective January 6, 2014. The FedEx Ground, FedEx Home Delivery and FedEx Smartpost increase will be announced in 4th quarter of this year. FedEx Freight has already imposed a 4.5% general rate increase, which took effect July 1, 2013. FedEx also announced 7% growth (year-over-year) for the 1st quarter 2013, reflecting improved operating margins and revenue growth.
Express surcharges, which are not included in the 3.9% average, will be increasing by 7.6% (average) in 2014. Notable surcharge increases include the following:
Declared Value: Increase of $0.05 (5.9%) to $0.90 per $100 in value with a minimum charge increase of $0.15 (5.9%) to $2.70
Delivery Area Surcharge Commercial (including Extended): Increase of $0.10 (4.7%) from $2.15 to $2.25
Delivery Area Surcharge Residential: Increase of $0.15 (4.6%) from $3.25 to $3.40
Delivery Area Surcharge Residential Extended: Increase of $0.15 (4.3%) from $3.50 to $3.65
Delivery Area Surcharge Multiweight (Commercial & Residential): Increase of $0.50 (4.7%) from $10.75 to $11.25
Residential Delivery: Increase of $0.15 (4.7%) from $3.20 to $3.35
Saturday Pickup & Delivery: Increasing $1.00 (6.7%) from $15.00 to $16.00
So, how does this affect you? The 3.9% Express increase is only an average…the impact to you WILL differ. The solution and strategy to minimize the effects of this increase will vary according to service level usage, zone density, package characteristics and distribution model. If you would like to discuss strategies to mitigate these rate increases, specific to your organization, please contact Source Consulting.
More to come in the near future as the carriers continue to release information related to the upcoming price increase.
Author
Rich Harkey
Rich Harkey
Senior Strategy Manager
Rich Harkey is a results-driven professional with extensive experience in the logistics and supply chain industry.
As the Senior Strategy Manager at Lojistic, Rich leverages over three decades of expertise to help businesses improve their shipping strategies and reduce costs. With a deep understanding of the requirements of shippers and the operational intricacies of carriers, he excels in everything from optimizing business rules and managing carrier invoices to negotiating carrier contracts.
Rich's comprehensive knowledge of the logistics industry, combined with his strategic insights and passion for data analysis, has enabled thousands of companies to gain visibility into their shipping expenses, driving impactful results.