will increase its rates by 3.5% on average for both its premium air services and ground home delivery, effective Jan. 7. The air/express increase includes a $1.35 per-package residential delivery charge for non-freight shipments; the diesel fuel surcharge for FedEx’s ground Home Delivery service, which is geared toward consumer catalogers, will increase from $1.05 to $1.10. Meanwhile, the surcharge for the business-to-business-oriented FedEx Ground service for the occasional shipment to residences will rise from $1.30 to $1.35. FedEx plans to make its complete rate charts available to customers on Dec. 7.
FedEx last raised its rates in February. In late 1999, the carrier initiated a fuel surcharge rather than a full-blown rate hike for 2000. FedEx spokesperson Carla Boyd Richards characterizes the ’02 rate hike as a “regular increase to offset inflationary pressures the company faces. It’s to ensure we can continue to provide our customers with reliable service backed by technology,” she says. Although FedEx, like rival United Parcel Service, usually increases rates across the board in January or February annually, Richards won’t rule out possible additional increases later in ’02.
The rate hike announcement follows a bit of good news. On Nov. 5, FedEx shifted away from a flat 4% fuel surcharge on air shipments to one that is adjusted monthly based on the U.S. Gulf Coast Fuel Index. As a result, the rate dropped to 3% in November and will fall to 2% in December.