FedEx recently announced the 2019 general rate increase that will go into effect January 7th, 2019. Express will increase shipping rates by an average of 4.9% for domestic and international services. Ground and Home Delivery shipping rates will also increase by an average of 4.9%. FedEx Freight shipping rates will increase even more by 5.9% on average for services in North America. Here is a link to the 2019 rates (PDF or CSV).
In addition to the general rate increase, FedEx will also increase 56 accessorial surcharges. There are a total of 36 surcharge price increases on small package services and another 20 increases for freight. FedEx has not disclosed the 2019 SmartPost rate increase, but they are coming.
Minimum Charge Increase
All FedEx packages are subject to a minimum charge as we have discussed in a past blog post. No matter how great your discounts may be, every package is subject to this rule and you could be losing valuable discounts. In 2018 the minimum package charge was $7.58. This will increase by 3.56% and become $7.85 in 2019.
The overall domestic express general rate increase we came up with is 6.6%, this could be due to lower increases in international rates which will average to the 4.9% increase as stated by FedEx.
Here is the 2019 FedEx price increase for domestic express with each service segregated. As you can see 2nd-day air and express saver will have greater price increases, many shippers are using more of these services to keep up with Amazon Prime.
How to Minimize the Impact
Most companies will accept the 2019 FedEx grice increase (GRI) without any hesitation, they merely transfer the additional logistics cost to the clients’ shipping costs. This could cause potential buyers to abandon their shopping cart due to high shipping costs.
If a company offers free shipping with online purchases, the company just absorbs the cost and makes less money. A company can mitigate these costs with a successful contract analysis and agreement renegotiation.
We have already witnessed UPS offering FedEx users a new agreement with a freeze in the general rate increase (GRI). Basically, the shipper will ship all package in 2019 on 2018 rates. Contact your carrier representative to ask for this, or contact us at Refund Retriever so we can evaluate your shipping needs and help with a full contract negotiation.
Check out Part 1!