Shipping business or personal packages gets more expensive in January as FedEx has announced higher shipping prices for 2019. While year-over-year price increases seem to be automatic, the shipping industry continues to experience higher demand, tighter capacity, increasing oil prices, driver shortages, the shipment of heavier/bulkier items and the continued upswing in e-commerce package volume from retailers like Wal-Mart and e-commerce leader Amazon.com.
Effective on 1/7/2019, FedEx prices for Domestic Express, U.S. Export and Import, Ground and Home Delivery Services will go up an average of 4.9% (percent). Freight rates will average a bit higher with 5.9% (percent) average increases and Surcharges averaging 5% (percent) or more.
FedEx list rates have been consistently increasing year-over-year for both Express and Ground shipments. To emphasize the magnitude of the compounding price increases over the past few years, the cost of a one pound package shipped from Atlanta to Dallas using Priority Overnight service would increase from $30.20 in 2007 to $62.68 in 2019 (not including surcharges), an increase of 108%!
ADDITIONAL RATE CHANGES TO NOTE – Beginning on September 3, 2018, additional handling surcharges are being applied to packages over 70 lbs. from $12 per package to $20 for US Express/Ground, and International Express/Ground services. The Unauthorized surcharge increased from $300 to $675 for Ground services – a 225% increase.
Effective from November 19, 2018, to December 24, 2018 new Surcharges will be applied to US Express and US/International Ground service:
– New $3.20 peak surcharge will be added for additional handling
– New $150 per package on unauthorized peak surcharge for Ground services only
– New $27.50 per package on oversized packages
NEW FUEL SURCHARGES – On September 10, 2018, FedEx announced changes on fuel surcharge tables to match UPS. Before the fuel surcharge adjustment, FedEx had some advantages over UPS for Domestic Air, Export, Import and Ground services by 1% to 5%. Post adjustment, FedEx is largely at par with UPS on fuel surcharge.
FIRST OVERNIGHT – First Overnight charges are increasing on average from 4.29% in Zone 2 to a high of 6.85% in Zone 8. The largest percentage increases on shipping weights are on Letter, over 51 lbs., and 100 lbs. or more.
FedEx retained the flat premium of First Overnight over Priority Overnight at $30 for each zone and weight break up to 100 lbs
PRIORITY OVERNIGHT – Priority Overnight rate increases are consistent at 5.4% across zones for weight up to 50 lbs. Rates for packages over 50 lbs. increase by 8.78% on average. Some zone/weight breaks have increases exceeding 10%, which has not occurred in recent years.
STANDARD OVERNIGHT – Other than Zone 4, Standard Overnight rate increases are consistent at 5.4% for weight up to 50 lbs. Zone 4 had smaller rate increases than Zones 2 through 8. Rates for packages over 50 lbs. increase by 7.53% on average.
ECONOMY 2-DAY – Average increases for Economy 2 Day are much higher than the announced 4.9% average. They range from a low of 6.37% in Zone 2 to a high of 7.6% in Zone 5 and Zone 6.
ECONOMY 2 DAY AM – FedEx took low increases across low weight breaks for short zones, averaging 3.21%. Overall 2-DAY AM service is positioned about 15% above 2-Day rates. FedEx again took above average increases for shipments over 50 lbs.
EXPRESS SAVER – Net rate increases for less than 50 lb. packages are generally flat from 5.4% to 6.0% across zones. Light packages such as 1 lb. and 2 lbs. get only a 4% net increase. Over 50 lb. long-haul packages get higher percentage increases as noted, generally, across the board.
GROUND – The average increase for Ground across Zones 2 – 8 is 5.28%. Usually FedEx increases rates across all weight breaks and zones, but in 2019, the Zone 3, 1lb. rate actually decreases by 1.5% from $8.36 to $8.23.
SURCHARGES – Most of the Surcharge Increases range from 5.0% to 7.69%. A few average above 10% including U.S. and International Express/Ground Handling Surcharge of 12.50%, US/International Express Freight at 25%, and Oversized Charges for US Express, Ground, and International Ground at 12.50%.
If you aren’t utilizing a 3PL expert today, now is the perfect time to find a partner who can help you navigate these new FedEx rates for 2019 and today’s shipping environment. AFS Logistics focuses on your business’ shipping spend, minimizes shipping charges, and trims out excess spending so you can worry about other areas of your business. Give us a call today at 877-242-3383 or email us at [email protected] to get started.
