FedEx Announces 2017 Rate Increases

On the heels of UPS’ 2017 rate announcement, rival shipping giant FedEx has updated its Shipping Rates, Surcharges and Fees for 2017. Most of the increases to rates, surcharges and fees will go into effect January 2, 2017; one major exception is a change to Fuel Surcharges, which goes into effect February 6. Below are some highlights from FedEx’s recent announcement, per http://www.fedex.com/us/shipping-rates/.

FedEx Shipping Rate Changes

  • FedEx Express package and freight standard list rates will increase an average of 3.9% for U.S., U.S. export and U.S. import services.
  • FedEx Ground and FedEx Home Delivery standard list rates will increase an average of 4.9%.
  • FedEx Freight rates will increase by 4.9% on average, applicable to the FXF PZONE, FXF EZONE, FXF 1000, FXF 501, freight box and other related series base rates.

Surcharge and Fee Changes

  • Additional Handling Surcharges for U.S. express package services, U.S. and international ground services, and International express package services will increase from $10.50 per package to $11 per package.
  • Alaska and Hawaii Pickup or Delivery Fee for FedEx SameDay Delivery will increase from $25 per shipment to $75 per shipment.
  • Oversize Charge for U.S. express package services and U.S. and international ground services will increase from $67.50 per package to $72.50 per package.
  • FedEx Freight Extreme Length surcharge will change from $85 to $150 and will be applied to shipments with dimensions of 12 feet or greater versus 15 feet.

Dimensional Weight Calculation Change

  • Dimensional weight for all shipments within the U.S. and FedEx Express shipments between the U.S. and Puerto Rico will be calculated by multiplying the length by width by height of each package in inches and dividing the total by 139. Previously, dimensional weight for all shipments within the U.S. and FedEx Express shipments between the U.S. and Puerto Rico was calculated by dividing the total by 166.

Fuel Surcharge Change

  • Effective Feb. 6, 2017, the fuel surcharge percentage for FedEx Express and FedEx Ground shipment will be subject to weekly adjustment. Until then, the fuel surcharges will continue to be adjusted on a monthly basis. The FedEx Express fuel surcharge will continue to be based on the USGC spot price for a gallon of kerosene-type jet fuel, and FedEx Ground will continue to be based on the on-highway average price for a gallon of diesel fuel. Currently, the fuel surcharge is based on a fuel price from two months prior to the month in which it is assessed. Effective Feb. 6, 2017, the fuel surcharge will be based on a weekly fuel price from two weeks prior to the week in which it is assessed.

It is worth noting that FedEx’s new DIM Weight divisor yields a charge that is higher than that of the UPS DIM Weight calculation, which currently continues to use a divisor of 166 for domestic shipments. This move has come as a surprise to many shipping experts, and UPS has not yet announced a DIM Weight calculation change following FedEx’s lead.