FedEx Increasing Ground Rates, Reducing Fuel Surcharge

Federal Express (FDX) announced that it will raise rates for ground shipping by 5.9%. Fuel surcharges are getting cut by 1%. For more details see: “FedEx Ground to Raise Rates 4.9 Percent

Note that this compares to a UPS rate hike of 4.9% for ground shipping, and recent moves by the U.S. Postal Service to hike shipping rates to stave off bankruptcy.

U.S. Postal Service increases prices an average of 5% for shipping services

The U.S. Postal service is raising prices in an effort to bring in enough revenue to avoid bankruptcy. Prices are going up for a whole host of shipping services including a 3.1% increase for priority mail. The price of a first class postage stamp is still increasing a penny from 44 cents to 45 cents as earlier scheduled for January 22.

For more details see AP story: “Postal prices going up for express, priority mail.”

Freight prices rising; Sen. Rockefeller says Congress must intervene

To the chagrin of West Virginia Sen. Jay Rockefeller, rising freight costs are a reality:

  • Nike Chief Executive Mark Parker said yesterday that  “rising freight, labor and oil costs are likely to add pressure to future results.”
  • Levi Strauss & Co. said earlier this week that it is raising prices on some products to cover rising costs “for raw materials such as cotton as well as for labour and freight.”
  • Across the pond, Associated British Foods said earlier this month that “high cotton prices and freight costs will put pressure on profit margins next year.”
  • Back in the U.S., ethanol producers are warning of higher shipping costs too: “Going forward, exports will be affected by an increase in shipping rates[.]  Container rates are expected to increase Oct. 1 by $300-400 per container. Rail rates will take an annual new crop increase, and physical rail cars themselves are tight and expensive.”

(Emphasis added.)

I’ll leave it to Inflation Watch readers to decide whether Congress should regulate railroad freight prices, as Sen. Rockefeller proposes.

U.S. Postal Service Proposes Price Increases

The cost of mailing a letter will likely go up soon. The U.S. Postal Service announced yesterday that it wants to increase the price of a first class postage stamp by another 2 cents or 4.5% as of January, 2011. The Postal Service cites on-going and worsening financial difficulties as the main force driving prices ever upward:

“Faced with plummeting mail volume traced to the recession and increased use of the Internet, the Postal Service is projecting a deficit of nearly $7 billion for the next fiscal year. Despite eliminating millions of work hours and reducing expenses by more than $1 billion every year since 2001, a budget gap remains….
….’There is no one single solution to the dire financial situation that the Postal Service faces…These proposed rate adjustments are moderate and part of a fair and balanced approach to insuring mail service for all Americans well into the future.'”

FedEx to raise its freight prices by 5.9 percent


FedEx says it will raise prices at its freight and national trucking unit by 5.9 percent on Feb. 1.

These rate increases apply to the company’s less-than-truckload shipments, where a number of smaller loads from a variety of shippers are consolidated on a single truck for final delivery.

FedEx to raise shipping rates


FedEx Corp. said Thursday it will raise shipping rates for its Ground and Home Delivery units by an average of 4.9 percent in 2010 — 1 percentage point less than this year’s rate hike.

FedEx announced in September it will increase shipping rates for Express packages shipped within or from the U.S. by an average of 5.9 percent in 2010, also 1 percentage point lower than FedEx’s rate increase this year. That rate is partially offset by a lower fuel surcharge.

UPS also is hiking 2010 ground rates.

Matson Navigation Co. raises shipping prices to and from Hawaii

The Honolulu Star-Bulletin reports that it’s going to get a little more expensive to live in paradise:

Hawaii consumers, already struggling in a tough economic environment, could see higher prices for groceries and other commodities next year.  Matson Navigation Co., the state’s largest ocean shipper, said yesterday it is raising rates for Hawaii service an average of 3.8 percent, with rates increasing $120 per westbound container and $60 per eastbound container, which traditionally has lower volume. In addition, Matson is raising its terminal handling charge by $125 per westbound container and $60 per eastbound container.


UPS Increases Shipping Rates

UPS just released its shipping rates for 2010 – increases across the board. See below:

“UPS (NYSE:UPS) today released new list rates for 2010, including an average increase of 4.9 percent for UPS Ground packages and an average net increase of 4.9 percent on all air express and U.S. origin international shipments.

The rate increase for air express and international shipments is based on a 6.9 percent increase in the base rate, less a 2 percent reduction in the air and international fuel surcharge index.

…The new rates take effect on Jan. 4, 2010.”