FedEx, the global freight transportation and logistics services provider, announced that its shipping rates are set to increase, effective January 4, 2021. While the 4.9% average increase matches previous years, there are a lot of changes that might affect your future shipping costs.
Besides FedEx’s residential surcharge adjustments, other notable adjustments include FedEx ground shipment costs, delivery area surcharge (DAS), extended delivery area surcharge (EDAS), and an update to their additional handling surcharge. These relatively restrained increases come as a relief since COVID-19 has prompted high rate increases to combat a high volume of residential deliveries.
Shipping Rate Increases for 2021
This year’s rate increases match the industry standard, including the rate at which FedEx increased its list prices the year before.
The following rate increases are from FedEx.com
Effective Jan. 4, 2021
- FedEx Freight rates will increase an average of 5.9%, applicable to the FXF 1000, FXF 501, Offshore (includes FXF 300, FXF 303, FXF 352 and FXF 370 series) and Commodity rates (includes pallet, volume or truckload).
- FXF PZONE and FXF EZONE rates will increase an average of 4.9%.
- FedEx Freight rates will also increase for FXFC 1100 (Intra Canada) rates, FXFM DD (Mexico Door-to-Door) rates and FXFM IMS (Intra Mexico Shipment) rates.
- FedEx Freight box rates will not increase.
Price Increase Effective Dates
FedEx Shipping Rate Changes*
Beginning January 2021
Beginning January 2021, FedEx will charge a 6% late fee to U.S. FedEx Express and FedEx Ground customers who don’t pay their invoice within their agreed upon payment terms. Details on this change can be found here.
Effective Jan. 4, 2021
- FedEx Express, FedEx Ground, FedEx Home Delivery®, FedEx SmartPost® and FedEx Freight rates will increase.
- There will be changes to shipping surcharges and fees that may apply to your shipment and affect your total shipping rate.
Effective Jan. 18, 2021
The following FedEx Express, FedEx Ground and FedEx Freight surcharge changes will also take place effective Jan. 18, 2021:
- There will be changes to how Additional Handling Surcharge is assessed for FedEx Express and FedEx Ground packages.
- FedEx Freight will introduce a High Cost Service Area Surcharge that applies to certain shipments.
- Certain U.S. locations will be assessed an International Out-of-Delivery-Area Surcharge or an International Out-of-Pickup-Area Surcharge for FedEx International Express Freight® services.
- Details on these changes can be found here.
Effective Feb. 1, 2021
Effective Feb. 1, 2021, there will be changes to how fuel is assessed for U.S. FedEx Express Freight shipments. Preview the fuel surcharge table effective Feb. 1, 2021.
How to Manage Shipping Costs
Between service increases, increased surcharges, and new ways of calculating specific fees, it is likely that these increases will affect your business in some way.
Be sure you understand these new charges when you get your first shipping invoice in 2021. Review the changes in detail and compare them to your invoices to estimate your costs ahead of time.
But it is also important to remember that you have the power to negotiate your FedEx shipping contracts. Reach out to one of our experts to see how you can help you negotiate yours to offset these increases ahead of their implementation in January.
Surcharges Follow Volume Spike
FedEx currently has surcharges for applicable home delivery shipments in place until November 1, as the Memphis logistics giant deals with a flood of packages spurred by the COVID-19 pandemic. As more people stay at home and order online during the pandemic, FedEx Ground delivery contractors have been operating at full speed for months.
In FedEx’s most recently reported quarter, Ground’s average daily package volume jumped 25% from the year before. Soon, FedEx workers will be handling a new surge of packages as people order gifts for the holidays.
Rival UPS and the U.S. Postal Service recently announced peak season surcharges of their own.
Customers shipping more than 35,000 packages on average per week during periods in October and November will see charges apply later in the year. Customers who qualify will be notified prior to the effective date.
The FLEX Logistics Team is Here to Help!
Working with a 3PL anytime of the year will improve your bottom line, but if there is any time that we urge shippers to utilize the resources of a third party logistics provider – it’s the holiday season! 3PLs have access to thousands of carriers across the country that can be called upon with short notice to transport your products to their destination.
Flex Logistics is comprised of retail logistics experts who can help shippers of consumer products ace transportation into stores or distribution centers during the holidays. Our retail-trained operations teams and service-first culture can help CPG shippers hit on-time delivery standards and achieve optimal outcomes. Whether you are looking to add a new warehouse to your existing operations, growing and need to increase your distribution efforts, or starting a new company, FLEX has the solutions to meet your supply chain needs.
Contact us today to discuss your current and future warehousing and logistics needs. We will work together with you to understand your requirements and develop a solution that will set you up for future success.