FedEx has announced their 2021 rate increases, and while the 4.9% average increase matches previous years, there are a lot of changes that might affect your future shipping costs.

These relatively restrained increases come as a relief since COVID-19 has prompted high rate increases to combat a high volume of residential deliveries.

Here are just a few of the changes that you can expect early next year:

  • FedEx Express, FedEx Ground, FedEx Home Delivery, FedEx SmartPost, and FedEx Freight rates will increase.

  • There are various shipping surcharges and fees that will increase by as little as 15 cents (for delivery area surcharges) and as high as $45 (for a Ground unauthorized package charge).

  • FedEx Freight will be adding surcharges to high-cost service areas in the United States. However, the list of ZIP codes isn’t available yet.

FedEx says that these rate changes will enable them to “continue investing in service enhancement, fleet maintenance, technology innovations, and other areas to serve customers more effectively and efficiently.”

Shipping Rate Increases for 2021

This year’s rate increases match the industry standard, including the rate at which FedEx increased its list prices the year before.

  • Express shipping rates for US Domestic, export and import services will increase by an average of 4.9%, along with Ground and Home Delivery.

  • Freight services are increasing at a slightly higher rate of 5.9% for those who use FXF 1000 and FXF 501 for shipments within the US and between the contiguous US and Canada.

FedEx Surcharges & Fees Increases

FedEx Express and Ground surcharges are increasing across the board for various delivery services, including:

  • A $.30 per package increase for delivery area surcharges 

  • A $5 per package increase, from $100 to $105, for oversized packages for specific delivery services.

See the full list of surcharge and fee increases here

New Surcharges

FedEx is also introducing three new surcharges:

  • There’s a new determination for additional handling surcharges. They now apply to packages exceeding105 inches in length and girth. This new determination will be added to the existing length and weight criteria.

  • FedEx Freight is introducing new high-cost service area surcharges within select ZIP codes in the US. This will include charges for origination or destination locations. FedEx has not released the list of locations yet.

  • International shipments to and from remote areas of the US will be assessed an international out-of-delivery-area/out-of-pickup-area surcharge for International Express Freight services. This will be based on the ZIP code location of the pick-up or delivery.

Freight services will also see a change in domestic fuel surcharges, which will now be calculated per pound and based on weekly fuel spot rates.

New FedEx Late Fees

On the operational side, FedEx will charge a 6% late fee to customers who don’t pay their invoices at the agreed-upon payment terms. Although this is the first time FedEx is charging a late fee, it is on par with UPS’s 6% fee that they charge to customers who are more than 14 days past their invoice due date that’s been in place since 2009.

Price Increase Effective Dates

Here’s a quick look at the dates these changes will go into effect.

January 1, 2021

  • 6% late fee for U.S. FedEx Express and Ground customers applies

January 4, 2021

  • FedEx Express, Ground, Home Delivery, SmartPost, and Freight rates will increase

  • Additional shipping surcharges and fees go into effect

January 18, 2021

  • FedEx Express, FedEx Ground, and FedEx Freight surcharge changes go into effect

February 1, 2021

  • Freight fuel assessment changes

Shipping Increases in 2020

This year, we saw the largest rate increases due mostly to the COVID-19 pandemic. As the world shut down, shipping carriers saw volume increases in residential deliveries, and they took several measures to adjust pricing.

The shipping company added a $.40 surcharge per package with FedEx SmartPost services. They also added a peak oversized package surcharge of $30  and a residential delivery surcharge of $.30 per package. While these peak prices are temporary, there’s no notice of when these will end.

High-volume shippers can also expect holiday peak pricing starting November 2.

How to Manage Shipping Costs

Between service increases, increased surcharges, and new ways of calculating specific fees, it’s likely that these increases will affect your business in some way. 

Don’t be caught off guard when you get your first shipping invoice in 2021. Review the changes in detail and compare them to your invoices to estimate your costs ahead of time.

But it’s also important to remember that you have the power to negotiate your FedEx shipping contracts. Reach out to one of our experts to see how you can help you negotiate yours to offset these increases ahead of their implementation in January.

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