With the end of the year just around the corner, FedEx has announced their 2022 General Rate Increases. Retailers and high-volume shippers beware: this year marks the highest GRI average rate increase since 2013 with the average rate increase for FedEx in 2022 sitting at 5.9%. This is a substantial increase from what was seen in previous years, with the last two years coming in at 4.9%.
Also included in this announcement are several other changes that might affect your future shipping costs and impact your company’s overall profitability.
“FedEx Freight shipping rates will increase by an average of 5.9% for customers who use FXF PZONE and FXF EZONE, and by 7.9% for customers who use FXF 1000 and 501. This change applies to shipments within the U.S. (including Alaska, Hawaii, Puerto Rico, and the U.S. Virgin Islands) and between the contiguous U.S. and Canada. FedEx Freight shipping rates will also increase for shipments within Canada, within Mexico, and between the contiguous U.S. and Mexico.”
Details of all changes to rates, surcharges, and fees are available on the FedEx website here.
FedEx claims that “these changes reflect incremental costs associated with the challenging operating environment, while enabling FedEx to continue investing in service enhancement, fleet maintenance, technology innovations, and other areas to serve customers more effectively and efficiently.”
Shipping Rate Increases for 2021
This year’s rate increases exceed the industry standard, far higher than the rate at which FedEx increased its list prices in previous years.
- FedEx Express shipping rates will increase by an average of 5.9% for U.S. domestic, U.S. export, and U.S. import services.
- FedEx Freight shipping rates will increase by an average of 5.9% for customers who use FXF PZONE and FXF EZONE, and by 7.9% for customers who use FXF 1000 and 501.
Price Increase Effective Dates
Here’s a quick look at the dates these changes will go into effect.
Effective November 1, 2021
- A fuel surcharge increase will be applied to FedEx Express (domestic package and freight services), FedEx Ground, and FedEx Freight shipments beginning November 1, 2021.
Effective January 3, 2022
- FedEx Express, FedEx Ground, FedEx Ground® Economy, and FedEx Freight rates will increase.
- Updated shipping surcharges and fees that may apply to your shipment and affect your total shipping rate.
The following FedEx Express, FedEx Ground, FedEx Ground Economy and FedEx Freight surcharge changes will also be added to your shipping costs:
- Effective Jan. 17, 2022, FedEx Freight will introduce a “No Shipment Tendered Surcharge” that applies when a pickup is performed and no shipment is tendered to the carrier.
- Effective Jan. 17, 2022, the “International Out-of-Delivery-Area Surcharge” and “International Out-of-Pickup-Area Surcharge” rates will be determined based on the corresponding tier of the ZIP code, postal code, or city of the shipment’s origin and/or destination location for International Express Freight and Parcel services.
- Effective Jan. 17, 2022, a “Delivery and Returns Surcharge” will be assessed on packages that are delivered or returned using FedEx Ground Economy services.
- Effective Jan. 24, 2022, the “Additional Handling Surcharge” and “Oversize Charge” rates for U.S. Express Package Services and U.S. Ground Services will be determined based on the shipment’s zone.
Details on these changes can be found here.
How to Manage Shipping Costs
Between service increases, increased surcharges, and new ways of calculating specific fees, it’s likely that these increases will affect your business in some way.
Don’t be caught off guard when you get your first shipping invoice in 2022. Once both carriers publish the new base rates, you can also use the Reveel Shipping Intelligence Platform to review your contract and perform an impact analysis using Reveel’s modeling and simulation technology. Model what impact new charges and fees may have on your business, so you’ll have a better understanding of what you’re facing in the year ahead. Get the plaform free today. Remember, you have the power to negotiate your FedEx shipping contracts. Book a demo with one of our experts to see how we can help you negotiate your contracts to reduce your shipping costs and offset these increases.
The Reveel App uses AI and machine learning to provide an unparalleled look into what’s impacting your bottom line. Through invoice audits, AI and Machine Learning technology, and rate modeling/simulations, you can see the health of your operation and assess pricing changes from parcel carriers like FedEx and UPS. Sign up for a free Reveel account today to see how you can leverage automation to synthesize your data, ship more for less, and reduce the time needed to identify issues and action items.
