FedEx to Raise Rates 3.5 Percent in 2002

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FedEx Corp. subsidiaries FedEx Express and FedEx Ground will increase rates an average of 3.5 percent effective Jan. 7, the company said yesterday.

The increase follows an announcement earlier this month by FedEx's chief rival, United Parcel Service Inc. that its ground shipping rates would rise 3.5 percent on that date. UPS also is increasing overnight and two-day express services by 4 percent.

FedEx Express will increase rates an average of 3.5 percent for shipments within the United States and for U.S. export shipments. This increase includes a $1.35-per-package residential delivery charge for nonfreight shipments within the United States to private residences, an increase in the courier pickup charge to $4 from $3 and an adjustment to the special handling fees for dangerous goods.

FedEx Ground also will increase rates an average of 3.5 percent. The residential delivery surcharge will increase from $1.30 to $1.35, and the FedEx Home Delivery surcharge will increase from $1.05 per package to $1.10. Both fees exclude the fuel surcharge, which is currently 3 percent.

FedEx Express lowered its 4 percent fuel surcharge to 3 percent beginning Nov. 5, based on a new index for calculating the charges on U.S. domestic and outbound shipments. The surcharge will be subject to adjustment monthly, using a rounded average of the U.S. Gulf Coast spot price for a gallon of kerosene-type jet fuel, as published monthly by the U.S. Department of Energy. This method more closely links the surcharge to market prices for jet fuel. Changes to the FedEx Express fuel surcharge, when calculated according to the USGC index and FedEx trigger points, are applied effective the first Monday of the month. The fuel surcharge will drop from 3 percent to 2 percent effective Dec. 3.

The increase is lower than last year's, when FedEx Express increased its list rates an average of 4.9 percent for shipments within the United States, effective Feb. 1. Rates for international shipments increased 2.9 percent. FedEx also raised FedEx Ground rates 3.1 percent on Feb. 5. At the time, analysts said the increases were higher than expected.

While FedEx usually implements rates in February, Carla Boyd, a FedEx spokeswoman, said that this year "we looked at the general market conditions and we thought this was the most appropriate action."

Beginning Dec. 7, customized list rates and rate guides will be available to Express customers on Ground list rates will be available on beginning Dec. 14.


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