“Effective January 2, 2023, FedEx Express, FedEx Ground, and FedEx Home Delivery rates will increase by an average of 6.9 percent,” the company said in a news release on Sept. 22. The general rate increase of 6.9 percent is the largest annual hike in the company’s history, according to FreightWaves.
In addition, the firm will raise FedEx Freight rates “by an average of 6.9–7.9 percent dependent on the customer’s transportation rate scale.” This is the first time in eight years that FedEx has raised freight rates by more than 4.9 percent.
According to the company’s latest rate list, the cost of overnight delivery for a one-pound envelope by 8 a.m. the next day will rise by 4.4 percent, to $68.04. The cost of two-day delivery by 10:30 a.m. will be $25.37, an increase of 7.9 percent.
The rate-hike decision was announced as part of the company’s fiscal 2023 first-quarter earnings report. FedEx’s net income for the three months ended Aug. 31 was at $875 million, a decline of more than 20 percent from the $1.1 billion in net income earned during the year-ago period.
During the earnings call, CEO Raj Subramaniam blamed rising prices for the poor performance.