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.
In its entirety, the following rate changes will be made:
The following FedEx Express, FedEx Ground and FedEx Freight surcharge changes will also take place effective January 20, 2020:
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.
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.
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