FedEx to Raise Ground Rates 4.9%

Dec 09, 2009 4:45 AM  By

FedEx announced late last week that it will increase the standard list rates for FedEx Ground and FedEx Home Delivery by an average of 4.9%, effective Jan. 4. The increase will match a previously announced rate increase by rival carrier UPS.

FedEx had announced a 5.9% rate increase for its FedEx Express service in September.

Gerard Hempstead, president of Hempstead Consulting and a former vice president for DHL, says that FedEx rate shipments are way down vs. two years ago, but the courier improved its earnings via layoffs and salary reductions and schedule manipulation.

“Now earnings improvement can come from a radical increase in shipments if there is a profound improvement in the economy or from price increases,” Hempstead says.

FedEx said on Dec. 7 that it’s experiencing better-than-expected growth in its FedEx Ground volumes during its second quarter, which ended Nov. 30.

FedEx’s net income for the first quarter ended Aug. 31 was $181 million, down 53% from $384 million in the prior year. The company reported revenue of $8.01 billion for the quarter, a 20% decrease from $9.97 billion last year.