FedEx Freight, the nation’s largest stand-alone less-than-truckload carrier, is first out of the gate to raise pricing this summer with a 6.9 percent rate hike to take effect on July 9.
The industrial freight arm of FedEx also will adjust absolute minimum charges and accessorial rates and charges, but said its fuel surcharge will remain unchanged. The general rate increase only affects base tariff rates, not contract rates negotiated with individual shippers, and comes as carriers say higher rates are needed.
LTL and truckload carriers at recent shipping events said higher operating costs, especially for labor and equipment, make higher rates and cost-cutting necessary.
The 6.9 percent rate increase also matches GRIs issued by most publicly owned LTL carriers last summer, though it’s higher than most GRIs in previous years.
Last September, FedEx Freight raised base rates 6.75 percent. Companies including YRC Freight and Con-way Freight hiked tariff pricing 6.9 percent in July and August.
General rate increases don’t cover the majority of LTL freight, but they are a barometer for trucking industry demand.
Since the recession, LTL carriers say they are keeping a larger share of those rate hikes as discounting dwindles.
“We believe most of (FedEx’s) competitors will follow suit with a rate increase in the July-August timeframe,” said David G. Ross, an analyst with Stifel Nicolaus.
Stifel Nicolaus expects LTL rates to climb 2 to 4 percent in 2012, as trucking operators retain pricing power during a choppy recovery.