FedEx Rate Increases for 2017
by Jillian Voege
FedEx just announced their general rate and surcharge increases for 2017, which will take effect on January 2nd, 2017. If you own an eCommerce business, we've highlighted a few surcharge increases and changes that might have a big impact on your shipping bill next year.
First, these are the rate increases by service:
- FedEx Express rates increasing by an average of 3.9% for U.S. domestic, U.S. export, and U.S. import services
- FedEx Ground and FedEx Home Delivery rates increasing by an average of 4.9%
- FedEx SmartPost rates will change
One big thing to take note of is how FedEx's fuel surcharges for FedEx Express and FedEx Ground will be adjusted on a weekly basis after January 2nd. FedEx says that this change is aimed at accurately reflecting actual fuel costs in their surcharges.
Also, like UPS, FedEx will be raising their residential surcharges by $0.20. So for FedEx Home Delivery, residential address deliveries will now cost $3.45 on top of the base rate.
Another big thing to look out for is the change to dimensional weight pricing. If you're unfamiliar with dimensional weight, the simple explanation is this: FedEx considers the weight of a package based on its size when pricing the cost of shipping the package. Whichever is heavier - dimensional weight or actual weight - will be used to determine the rate. The reason for dimensional weight is because of spacing issues, a 10" x 10" x 10" package that weighs 3 pounds can be just as cumbersome to move as a 5" x 5" x 5" package that weighs 6 pounds.
So in 2017, FedEx will be changing their formula for calculating dimensional weight for domestic shipments, changing the divisor from 166 to 139. The new dimensional weight formula for domestic packages is now:
(Length * Width * Height) / 139
This makes dimensional weight for domestic packages the exact same as dimensional weight for international packages. If you send light but large shipments on a regular basis, you could see a big hit on your shipping bills with FedEx.
In all, FedEx's rate increases are aimed at recouping costs in fuel, space, and fleet investment. The continued growth of eCommerce will continue to put more and more strain on FedEx's fleet, infrastructure, and network. As such, we can continue to expect these kind of rate and surcharge increases to continue.
We've also highlighted some other rate hikes that could affect your overhead:
- Additional Handling Surcharge increases $0.50
- Address Correction fee increases $1.00 (for FedEx Ground and Express shipments)
- Alaska/Hawaii Pickup and Delivery for FedEx Sameday increases $50.00
For a complete overview of FedEx's rate and surcharge increases, take a look at here.