FedEx Ground to Raise Rates 4.9 Percent

FedEx Ground will raise rates for its U.S. package and home delivery services an effective 4.9 percent Jan. 2, matching a previously announced rate hike at FedEx Express and the increases announced by UPS.

The average rate will rise 5.9 percent but a 1 percent reduction in the company’s fuel surcharge will bring the net average rate increase down to 4.9 percent, matching the rate hike planned by UPS.

FedEx Express in October said it would increase package rates an average of 5.9 percent in the U.S., including imports and exports, while reducing its fuel surcharge. The ground package and air freight rate hikes in the U.S. show FedEx’s confidence that it can sustain higher pricing and growth despite a slow growing economy.

FedEx Ground increased its revenue in the last quarter 16 percent to $2.3 billion. The division accounted for 21.7 percent of FedEx’s total revenue in the quarter.

Domestic packages and industrial freight combined to drive FedEx’s operating profit up 17 percent to $737 million in the fiscal quarter that ended Aug. 31.

Contact William B. Cassidy at wcassidy@joc.com. Follow him on Twitter at @wbcassidy_joc