FedEx Ground Raises Rates 4.9 Percent

FedEx will raise list prices for its ground parcel service an average 4.9 percent in 2010, matching the rate increase announced by competitor UPS.

The increase FedEx Ground announced late Thursday is lower than the average 5.9 percent net rate hike set earlier for air express delivery and comes in a package division that has reported relatively strong results in a struggling U.S. domestic economy.

FedEx Ground expanded its operating profit 7 percent in FedEx’s fiscal quarter ending Aug. 31, and revenue fell only 2 percent, a sharp contrast with double-digit declines in other operations.

The relative strength of the parcel business suggested shippers were trading down from most costly express services.

Revenue and volume figures at FedEx Ground grew from the previous quarter, and the division’s revenue per package -- a rough measure of pricing strength -- has slipped only slightly.

UPS late last month announced average net increases of 4.9 percent across its services. Like the other price increases, the ground rate hike for FedEx takes effect Jan. 4.