FedEx Freight to Increase Rates 5.9 Percent

FedEx Freight will raise its base rates 5.9 percent Feb. 1, signaling its retreat from a less-than-truckload price war that cut into profits in the second half of last year.

The nation's second-largest major LTL carrier is the second large trucker to call for a rate increase this year. Old Dominion Freight Line will raise rates 4.4 percent Jan. 18.

The rate increase applies to shipments handled by FedEx Freight and FedEx National LTL in the U.S. and Canada, the company said. The Memphis-based carrier said it also would adjust its minimum and accessorial charges and fuel surcharge.

It's a sign that carriers are trying to put the brakes on a slide in LTL pricing that cost many companies a sizeable amount of profit in the second half of 2009.

Trucking companies offered steep discounts off base rates in a fierce fight for freight that intensified in the third and fourth quarters as retailers began rebuilding inventories.

LTL rates were already anywhere from 5 percent to 15 percent lower than a year ago going into December, according to analysts and carrier executives.

With excess capacity still plentiful in the LTL market, it's unclear whether carriers will be able to make rate increases stick, or if shippers will press for deeper discounts.

Contact William B. Cassidy at wcassidy@joc.com.