FedEx’s New Rate Increases are Here!

Everything you need to know about the new FedEx GRIs

Well, it’s that time of year again when we start to receive notices of General Rate Increases (GRI’s), for the major freight carriers.  To start, this year’s parcel carrier GRI notices have been led by FedEx and of course as we all know, this is just the beginning of next year’s GRI notifications.   

The magnitude of the announced FedEx increases comes as no surprise to us.  With all of the recent negative operational and financial news surrounding FedEx, it is not surprising that FedEx’s “AVERAGE” General Rate Increase for this coming year is significantly higher than it has been in the past.  For 2022, FedEx jumped their annual “AVERAGE” GRI from the previous year’s 4.9% to 5.9% .  This year, FedEx is increasing their Annual “AVERAGE” GRI to 6.9% .  Historically UPS’s GRI levels have matched or been very close to those announced by FedEx. We have no reason to believe that this year will be any different.

So, we expect that UPS will announce similar GRI’s in the near future.

It’s important to remember that the term “On Average” means some increases will be less than the 6.9% in certain categories, and some will of course be much higher than 6.9%.  Shippers should not be fooled into thinking the actual increase is 6.9% across the board.  And yet, you would be amazed at how many companies use the average increase figure for their annual shipping budgets. 

Parcel shippers really need to take the time to analyze their individual shipping characteristics to see exactly what the impact will be on their freight costs going into 2023. The FedEx rates will go into effect on January 2, 2023, shortly after parcel shippers incur the Peak Season shipping surcharges, which can also have an unexpected impact on Shippers bottom line profits. 

To put these increases into perspective, the following are some examples of what the “Actual” increase FedEx parcel shippers will experience. 

1.       Ground Service, 2 Pound Package to Zone 5 – Actual Increase will be 7.6%

2.       Priority Overnight, 5 Pound Package to Zone 2 – Actual Increase will be 8.5%

3.       Standard Overnight, 10 Pound Package to Zone 3 – Actual Increase will be 8.5%

4.       Two Day Delivery, 25 Pound Package to Zone 5 – Actual Increase will be 8.9%

5.       Express Saver, 5 Pound Package to Zone 8 – Actual Increase will be 11.9%

And that is just the beginning.  The above package rate increases are also subject to a variety of surcharges that are also increasing.  Here is a brief overview of some of FedEx’s actual increases for some of the more common surcharges.

1.       Address Corrections – 7.7% Increase

2.       Delivery Area Surcharge – Home Delivery – 10.4% Increase

3.       Extended Residential Delivery Area Surcharge Ground – 10% Increase

4.       Oversize Express, Ground and Home Delivery – 17.2% to 22.7% Increase

Besides the GRI, Small Package carriers often introduce new rules and surcharges that can have a major impact on parcel shippers’ bottom lines.  It goes without saying, parcel carrier pricing continues to become more and more complex and difficult to manage on your own.  But remember, you don’t have to navigate these uncharted waters single handedly, there is help available.  

As we have done for over 10 years now, our Parcel Analytics experts has created newly updated 2022 vs. 2023 FedEx General Rate Increase Charts which are available free of charge just by requesting them on our website.   

And, if you really want to finally take control of your parcel shipping costs, reach out to us and speak with one of our Parcel Pricing Experts to discuss how your firm would benefit from our Contract Analysis and Benchmarking Services.