The season for general rate increases (GRI) is here. FedEx announced its yearly rate increase on September 18, making it the first major carrier to do so for 2018. Most of the new rates will take effect January 1, though a few surcharges won’t come into play until January 22.

In recent years, UPS has been the first carrier to announce a GRI. After announcing a peak season surcharge, the Atlanta-based carrier waited until Oct. 26 to release a rate hike for the coming year.

Related: Comparing Shipping Rates in 2018: FedEx vs. UPS vs. DHL vs. USPS

Changes to FedEx Rates

FedEx says rates will increase by an average of 4.9%, along with higher surcharges and fees. In addition, FedEx One Rate pricing will increase by an average of 3.5%.

These are a few of the service levels that will see the 4.9% average increase for 2018:

  • FedEx Express package and freight standard list rates
  • FedEx Ground and FedEx Home Delivery
  • FedEx Freight categories FXF PZone, FXF EZone, FXF 1000, FXF 501, and freight box

A variety of surcharges and fees are also going up in the new year. The table below details some of the key surcharges shipping-based businesses will encounter. FedEx has the full list of surcharges on its website.

Service Level

2017 Rate

2018 Rate

Total Increase

Additional Handling Surcharge

$11

$12

$1

Address Corrections

$14

$15

$1

Delivery Area Surcharges

$2.60 – $24

$2.70 – $26

$0.10-$0.20 in most cases

Oversized Charge

$72.50

$80

$7.50

Residential Delivery Charge

$3.85

$4.15

$0.30

Source: FedEx

Changes To Dimensional Weight

The general rate increase wasn’t the only pricing news FedEx dropped this week. A few days after announcing its 2018 updates, the carrier announced another major change.

Effective January 22, the carrier will begin applying a dimensional weight factor of 139 to all SmartPost parcels. The new pricing puts SmartPost pricing in line with that of FedEx Express and FedEx ground shipping options.

What does this mean? In addition to putting the pricing in line with other FedEx shipping options, it also more closely aligns costs with UPS SurePost, a similar service. The competing carrier has yet to announce its 2018 rate changes, so this may change.

Because SmartPost uses the USPS for the final leg of delivery, businesses often use it as a free or low-cost shipping option for price-conscious consumers. Depending on the size of your parcels and their final destination, this extra charge could create a significant hike in your shipping spend.

As businesses confront ever-increasing shipping rates, they must decide how to balance the cost consumers pay for shipping with the difference in their profit margins.

How To Reduce Shipping Costs

Shipping rates have been increasing steadily for years, so the news of the 2018 GRI from FedEx should come as no surprise. However, there are steps you can take to mitigate the extra costs.

First, know your data: Just because FedEx says most prices will increase by about 4.9% doesn’t mean you can tack that number onto your existing spend and call it a day. The myriad of surcharges and other piecemeal costs means that your total bill will likely increase much more than that. Understanding all of the details of your shipping spend will give you the upper hand to negotiate a better rate.

Related: Decoding Your Shipment Data: Surprising Information Your Analytics Reveal

Compare rates: Once you have a complete picture of your shipping data, it’s time to compare rates between carriers. Reveel lifts the veil on pricing that carriers are offering to similar businesses, giving you valuable industry and regional benchmarks. Our data can shed light on whether you’re getting the best possible rate — and give you the tools you need to negotiate a better one.

Check invoices: Finally, a larger range of surcharges and fees means more room for error. Shipping invoices are known for being hundreds of pages long and complex, making it difficult to spot mistakes. Invoice auditing services, like Reveel’s, can help you spot these errors and claim your credits.

Though shipping rates will continue to increase, understanding your shipment data, knowing your industry and regional benchmarks, and auditing your data will give you leverage to negotiate with your carrier for the best rates.

Our dedicated team of local experts can give you valuable market insights and identify opportunities to save money in 2018 and beyond. Sign up for a free invoice audit to discover ways that you can save an average of 3% to 5% on your shipping costs.

(Update: This article has been updated with information on UPS’s yearly rate increase.)

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