We’re seeing the light at the end of the tunnel on 2020, and with that, as is the case every year around this time, the annual GRIs from carriers are here. On September 14th of this year, FedEx announced an average increase of 4.9% for Domestic Express, US Export and US Import, Ground and Home Delivery services.
These increases come as no surprise since they’ve been implemented for over 20 years now, but when you look at the change over time, it may shock you. Case in point: The cost of a one-pound Priority Overnight package from Atlanta to Dallas was $37.85 in 2010. In 2021, that will increase to $69.56. That’s an 84% jump!
So, without sifting through all the details, what do you really NEED to know? We’ve hit the high notes below:
- Base rates for Domestic Express, US Export and Import, Ground and Home Delivery:
- Expect an average increase of 4.9%.
- 2-day AM rates and Ground minimum will have the highest increases of 6.3 – 9%.
- SmartPost rates will remain the same as Ground for weights up to 9 lbs. Anything over 9 lbs. will have a 27% premium over Ground.
- Delivery Area Surcharges:
- The average increase ranges from 4.8% to 9.3%.
- 709 new zip codes have been added.
- 2020 peak season will last longer and will be more expensive.
- October 5, 2020 – January 17, 2021
- Peak surcharges will be added to multiple existing surcharges. Example: A package weighing 60 lbs. will incur Additional Handling at $24 per package, but during peak there will be an additional charge of $4.90 per package.
- The Oversize Peak surcharge of $52.50 is 40% higher than last year.
- A new Peak surcharge for SmartPost, equaling $1.00 – $2.00 per package is introduced.
- Residential Surcharge:
- The Residential Surcharge implemented during the COVID-19 pandemic will continue through Peak season. It primarily targets high volume shippers who average 35,000+ packages/week. This includes SmartPost and impacts both residential and commercial.
Additional increases to note include:
- US Express and Ground Late Fee: A late fee of 6% will be added for invoices not paid according to approved payment terms. Effective January 1st.
- Additional Handling: New assessment criteria (length + girth greater than 105 inches) added with a surcharge of $16 per package. Effective January 18th.
- International Out-of-Pickup-Area and Out-of-Delivery-Area Surcharge: Added for Express Freight to/from the U.S at $42/shipment. Effective January 18th.
- Domestic Express Freight Fuel Surcharge: Will change from a percent-based structure to weight-based meaning it will go from 3.5% to $0.252/lb. Example: Fuel surcharge for a 1-day freight shipment with a minimum weight of 151 lbs. in Zone 4 will go from $25 to $38. Effective February 1.
Understanding how these annual rate increases effect your shipping costs can be confusing, complicated and time-consuming. It’s also crucial to the financial strategy of your business. AFS provides industry experts to optimize your shipping costs while maximizing your efficiency. For a detailed analysis of how to mitigate the impact of the 2021 GRI, give us a call at 877-242-3383 or send an email to: email@example.com.
If you’d like to view our full breakdown of the 2021 FedEx changes, you can download it here.