Just two weeks past the midpoint of Q3, FedEx is already giving us a glimpse into 2024. And there’s good new and bad news for shippers. The good news is that the increase isn’t as much as 2023’s. The bad news is that it’s still quite a bit larger than long held historical increase of 4.9%
On August 29, FedEx announced its 2024 rate changes and 2023/24 peak season surcharges. Find out why industry leaders are surprised by the rate announcement and how you can save— even when rates go up.
In 2022, FedEx increased rates by 5.9%— the largest increase in a decade. The very next year, it upped rates again. The 2023 rate increase of 6.9% was the most significant year-over-year increase in the company’s history.
While many expected the 2024 rate hike to mirror 2023’s, the carrier surprised many when it announced an average rate increase of 5.9%, which will go into effect on January 1, 2024. FedEx’s 2024 rate increase announcement came just four days after the UPS Teamsters approved the new labor contract, which will lock UPS into paying higher wages throughout the contract. Is it a coincidence that FedEx announced lower-than-expected rates as UPS needs to increase its revenue? We don’t think so.
FedEx plans to announce its detailed rates and surcharges on September 7. So far, they have announced that the average rate increase for FedEx Express package services, freight standard list rates for U.S., U.S. export, and U.S. import services, and FedEx Ground standard list is 5.9%.
As of September 4, 2023, FedEx will wipe every trace of the word “peak” from its corporate vocabulary. The carrier is replacing and rebranding peak season as “demand.” FedEx announced, “Demand surcharges are determined for each market based on regular assessments of shipment volume and capacity within our network to accommodate.” Increases aren’t just a possibility during the holiday season; they can happen anytime.
For customers using FedEx Express and Ground services between October 2, 2023, and January 14, 2024, here are the new demand rates:
The demand surcharges for FedEx Economy Ground services are:
Demand surcharges between October 30, 2023, and January 14, 2024, for FedEx Express and FedEx Ground U.S. domestic residential packages (not including FedEx Ground Economy and FedEx One Rate® packages) range from $1.35 to $7.40 per package. These rates depend on the shipper’s volume and a peaking factor.
Although the 5.9% rate increase is lower than anticipated, it’s still a hefty increase. Before the new rates and demand shipping fees go into effect, audit your current contract with ShipRx. It’s free to start, and you only pay when you save money.
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