The 2020 FedEx Price Increase that will go into effect on January 6th, 2020. Express will increase rates by an average of 4.9% for domestic and international services. Ground and Home Delivery shipping rates will increase by an average of 4.9%. FedEx Freight shipping rates will increase even more by 5.9% on average for most zones in North America.
The chart above illustrates the 2020 FedEx price increase over the 2019 published rates for each domestic service. All but two FedEx services see a price increase under the average of 4.9% as advertised. Express Saver and 2nd Day Air will see an increase of over 4.9%. FedEx Second Day Air will rise by 5.5% and Express Saver (3-Day Air delivery) will see a 7.1% increase.
Express Saver provides delivery to businesses by 4:30 p.m., and to residences by 8 p.m. in 3 business days or less. Many eCommerce sellers are using this option more and more to meet the demands of today’s online buyers. The Amazonification of buyers’ preferences is fueling this shift from Ground to Express services. In summary, Amazonification is real and it is causing today’s sellers to spend more on shipping in order to stay in business.
FedEx Ground Price Increases
As the chart above shows, the greatest increase will be zone 5 to zone 7. Zone 7 will see a 5.24% rate increase on average for all weights. The smallest increase will be in Zone 3. Zone 3 will see a 4.74% price increase in 2020 for all weights on average.
The chart above illustrates the price increase in 2020 for FedEx ground packages according to weights. The lowest average increase will be on packages weighing 100 to 150 pounds. Incidentally, these are not very common among Refund Retriever clients. In conclusion, the highest increase will be for packages in all zones that weigh 20 to 60 pounds.
Home Delivery Rate Increases
FedEx Home Delivery shipments have the same rates applied as FedEx Ground packages. However, there is an additional charge applied since it is being delivered to a residence. Therefore, FedEx Home Delivery packages will be charged as if they were Ground packages but will see a $4 residential surcharge on each package.
Since the residential surcharge went up this year, we also decided to analyze the price increase with this fee applied. As you can see, the numbers do change and Home Delivery packages have a higher rate increase than Ground packages.
FedEx Express Rate Increases
As it is evident by all the charts, FedEx Express Saver will have the highest 2020 FedEx price increase. The increase mimics the higher zone increases as Ground and Home Delivery packages.
The chart below shows the average price increase for all zones and weights for each Express domestic service. As you can see, the Second Day and Express Saver package increases are the highest.
How to Minimize the Impact of 2020 FedEx Price Increase
Most companies will accept the 2020 FedEx price increase (GRI) without any hesitation. They merely transfer the additional logistics expenses to the clients’ shipping costs. This could cause potential buyers to abandon a full shopping cart due to high shipping costs. Therefore, FedEx users need to address price increases head-on.
We have already witnessed UPS offering FedEx users a new agreement with a freeze in the general rate increase. Basically, the shipper will ship all packages in 2020 on 2019 rates. Contact your carrier representative to ask for this rate freeze. In addition, you can contact us at Refund Retriever to evaluate your shipping needs and help with full contract negotiation.