FedEx Announces Significant Rate Increases

By September 26, 2018 News

On Monday, FedEx modified its Express and Ground fuel surcharge rates, and created new indexes for International Export and Imports. These changes mean significant rate increases for nearly all FedEx shippers.

Shippers shouldn’t confuse this rate change with the weekly, normal fluctuation in fuel surcharge percentages based on market prices (as published by the Department of Energy), described as follows: “The fuel surcharge percentage for FedEx Express services is subject to weekly adjustment based on the weekly published U.S. Gulf Coast (USGC) spot price for a gallon of kerosene-type jet fuel. The fuel surcharge percentage for FedEx Ground services is subject to weekly adjustment based on the weekly published national U.S. on-highway average price for a gallon of diesel fuel.”

What’s different about the Sept. 10 rate change is the fact that FedEx added .75 percent to previous Express fuel surcharge tables, and a full 1 percent to Ground fuel surcharge tables.

Moreover, for the first time ever, FedEx created separate, higher fuel surcharges for international products.

Measuring the impact from the previous week, FedEx shippers just took a 16 percent to as much as a 69 percent rate increase!

How do the new FedEx fuel surcharges compare to its rival UPS?

Well, since November 2012, FedEx customers have enjoyed lower fuel surcharges than UPS. Not anymore (see chart below).

Shipware is here to help you understand the financial implications to your business and, more importantly, give you tools to push back on these austere rate hikes. If you would like to investigate options with our expert team, please contact us at 858-879-2020 ext 111.

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Author Shipware Admin

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