FedEx Announces 2018 Rate Increases – Now What?

Earlier this week FedEx announced their 2018 rate increases, and retailers and other parcel shippers across the country are buzzing. Taking effect January 1, the average 4.9% rate increase will affect Express, Ground, and Home deliveries. FedEx also announced changes to their shipping surcharges and fees.

Here’s what logistics magazine, Parcel, had to say about the news:

“As a shipper, you need to understand the true impact on your business. And I promise the true, effective impact will be more than 4.9% the carrier cites as an average,” wrote Parcel author, Andrew Brueckner.

Brueckner outlined the details from FedEx’s update that are most relevant to shippers:

• Additional Handling Surcharge increases by one dollar (9.1%) to $12.
• Address Corrections increase by one dollar (7.1%) to $15.
• Delivery Area Surcharges increase by $0.10 and $0.20 in most cases, depending on service type.
• Residential Delivery Charge is up to $4.15, an increase of $0.30 (7.8%).
• Oversized Charge increases by $7.50 (10.3%) to $80.
• 1lb. Ground Zone 2 increases by $0.33 to $7.58.

Brueckner went on to make several recommendations regarding what to do next, including understanding the “true impact of these rate increases.” He continued, “Mitigation begins with understanding, which starts with measuring. The carriers make these decisions based on data. So should you.”

He also recommended modeling your 2018 budget and planning accordingly, including looking at “opportunities to make operational changes to offset rate increases.”

As a business owner or operator, it can be a real challenge to either eat these increased costs or pass them onto your customers at a time when it’s imperative to be as competitive as possible. That’s why it’s important to find an alternative delivery solution, especially for local, last mile deliveries.

Dropoff’s same-day delivery service offers a convenient and flexible solution. Most importantly, you can rest easy knowing that Dropoff never tacks on hidden fees or surcharges. The price we quote is the price you’ll pay.

As large package delivery companies continue increasing rates and tacking on fees and surcharges year after year, the time is now to start leveraging a more convenient, flexible and transparent delivery solution.  

You can read the full Parcel article here.