FedEx Announces 2017 General Rate Increase, Other Changes
In a somewhat surprising move to industry analysts, FedEx has announced shipping rate and surcharge changes for 2017 that do not match those announced Sept. 1 by rival UPS.
FedEx Express, FedEx Ground and FedEx Freight, subsidiaries of FedEx Corp., will increase shipping rates effective Jan. 2, 2017 as follows:
- FedEx Express will increase shipping rates by an average of 3.9 percent for U.S. domestic, U.S. export and U.S. import services. Rates for UPS services will increase 4.9 percent for similar service categories.
- FedEx Ground and FedEx Home Delivery will increase shipping rates by an average of 4.9 percent. FedEx SmartPost rates will also change. While UPS also announced a 4.9 percent average increase, the UPS and FedEx published rates will not match in 2017. For example, the ground minimum charge for FedEx will be $7.25 compared to $7.32 for UPS.
- The dimensional weight calculation for FedEx Express and FedEx Ground packages will change from 166 to 139. On the other hand, UPS did not change the dimensional divisor for U.S. domestic services.
- FedEx Freight Extreme Length surcharge will change from $85 to $150, and will be applied to shipments with dimensions of 12 feet or greater vs. 15 feet previously.
- Other FedEx surcharges and fees will increase in 2017. Delivery Area Surcharges (DAS) will no longer match between FedEx and UPS.
- FedEx Freight will increase shipping rates by an average of 4.9 percent. This rate change applies to eligible FedEx Freight shipments within the U.S. (including Alaska, Hawaii, Puerto Rico and the U.S. Virgin Islands), between the contiguous U.S. and Canada, within Canada, between the contiguous U.S. and Mexico, and within Mexico.
Effective Feb. 6, 2017, the fuel surcharge percentage for FedEx Express and FedEx Ground shipment will be subject to weekly adjustment. Previously, the surcharge was based on a monthly average.
The most striking change announced is the adjustment in dimensional weight calculation, which have been in place since 2011. Prior to 2011, the dimensional divisor was 194. Today, it's 166, and effective Jan. 2, 2017, it will be reduced to 139, which is the current divisor for International Export and Import shipments.
This change for many shippers is cataclysmic. As of this writing, UPS hasn't announced any intention of following the lead of its rival, FedEx.
Preview of FedEx 2017 Express/Ground pricing is available at: http://images.fedex.com/us/services/pdf/FedEx_StandardListRates_2017.pdf
Preview of FedEx 2017 Ground Multiweight pricing is available at: http://images.fedex.com/us/services/pdf/FXG-Multi_StandardListRates_2017.pdf
Preview of FedEx 2017 surcharges and fees is available at: http://www.fedex.com/us/shipping-rates/surcharges-and-fees.html
Shipware will analyze these and other changes in greater detail and publish additional analyses in the coming days. In conjunction with Neopost, we will also offer a free webinar in the coming weeks to highlight all 2017 general rate increase changes for both FedEx and UPS. In the meantime, I welcome comments and questions at email@example.com.
Related story: FedEx Announces 2016 General Rate Increase and Other Changes
Rob Martinez is the CEO of Shipware LLC, a professional services firm that transforms businesses through intelligent distribution solutions and strategies. Rob has helped some of the world’s most recognizable brands reduce parcel shipping costs an average of 25 percent through contract negotiations, rate benchmarking, modal optimization, invoice audit and other savings vehicles. A cum laude graduate of UCLA, Rob has 20 years of transportation industry experience, including executive positions at DHL and Stamps.com, in addition to his work as an outside consultant since 2001.