FedEx Announces 2020 Rate Increases

FedEx has announced its general rate increases (GRI) for the upcoming new year. The annual increases start on January 6, 2020 and will affect various FedEx services. Although shipping rates will be increasing in early January, FedEx also announced they will not be charging additional holiday residential surcharges. They will only surcharge shipments that are over-sized, unauthorized or require additional handling.  

RATE CHANGES AT A GLANCE

In its entirety, the following rate changes will be made:

• Shipping rates will increase by an average of 4.9% for FedEx Express (U.S. domestic, U.S. export and U.S. import services).
• Rates will also increase by 4.9% for FedEx Ground and FedEx Home. FedEx SmartPost shipping rates will also increase.
• FedEx Freight shipping rates will increase by an average of 5.9% for shipments within the U.S. (including Alaska, Hawaii, Puerto Rico, and the U.S. Virgin Islands) and between the contiguous U.S. and Canada. FedEx Freight shipping rates will also increase for shipments within Canada, within Mexico, and between the contiguous U.S. and Mexico.

The following FedEx Express, FedEx Ground and FedEx Freight surcharge changes will also take place effective January 20, 2020:

• Applicable services, criteria and pricing for FedEx Express and FedEx Ground packages that require additional handling or are over-sized will change.
• There will be changes to applicable surcharges for FedEx Express and FedEx Ground fuel surcharge assessment.
• Applicable criteria for the FedEx Freight Capacity Load minimum charge will change.

UNDERSTANDING THE CHANGES

These price changes will affect every business differently based on the type of shipping service, package weight, and applicable zone. It’s important to remember that even minor increases (say 4% in price) can add up in large volumes, so if you’re in the business of shipping hundreds of products to your customers, then these changes can have major ramifications.

As a retailer for order fulfillment, it will fall on you to understand how your shipping options will ultimately affect the costs passed onto you and your customers. It can help to precisely measure all of your packages before sending them. If you’ve noticed that some of your packages yield a lot of wasted space, then look for ways to reduce the dimensions and your shipping costs. Failing to prepare your store for these new changes can result in higher charges for your customers, which may lead to increases in abandoned carts. 

GRI'S ANNOUNCED AFTER SPLIT FROM AMAZON

This announcement is revealed just months after FedEx has decided to not renew its ground-shipping contract with Amazon. Amazon has increasingly become a competitor of FedEx, building its own delivery system. Therefore, FedEx has decided to focus on expanding its own shipping efforts separate from the eCommerce giant.

PLAN ACCORDINGLY

In summary, GRI's occur due to increasing economic costs like higher prices in fuel, equipment, and technology. As an online seller, the best way to transition into an annual rate increase is to plan accordingly. To prepare for these changes make sure you’re choosing the right carrier service for your orders and accurately assess your packages to avoid any surcharges. If you’re in need of a smooth transition, DesktopShipper can help evaluate your shipping strategy to ensure you’re saving money all the way into the new year.  

For additional information visit the FedEx website.

Source: FedEx Press Release