Effective January 1, 2018, FedEx Express package standard list rates will increase an average of 4.9% for all domestic services. This rate increase will effect the following domestic services: first overnight, priority overnight, standard overnight, 2 day AM, 2 day, and express saver. The rate increase as announced is 4.9% average for all services, but when each service is calculated the 4.9% is not an average for each service.
4.9% is only the average across all weights and services!!
As you can see, the highest rate increases are on services that are more commonly used by Amazon merchants. Online retailers that choose fulfillment by merchant (FBM) will be impacted the most. Fulfillment by merchant is when the seller is in control of the entire handling and shipping process. Rather than paying the service fee and shipping inventory directly to Amazon, the seller sends the orders directly to the buyer. FBM sellers use 2 day air and express saver more frequently than the faster overnight services.
As you can see from the graphs above, the rates have the greatest increase as the zone rises. Zone 8 having the highest average rate increase for all overnight services. Zone 8 packages are the most expensive and now have the highest increase, this will have a huge impact on parcel shippers.
If you have additional questions on how these increases in the cost of transportation impact your bottom line, contact Refund Retriever. Our services will provide the intelligence and insight needed to reduce shipping costs. Our small parcel package auditing software can reduce your logistics spend instantly and help achieve lower FedEx negotiated rates. Parcel rate negotiation is important, don’t let your rates keep rising.
Related Blog: 2018 FedEx Ground Rate Increase