FedEx has just announced a new round of rate hikes, but they won't be in effect until after the holiday peak shipping season. The company plans to increase shipping rates on its Ground and Home Delivery services by an average of 5.9% in 2009. FedEx Express services are expected to increase by 6.9% next year, according to a previous projection from the company.
These increases may come as a surprise to consumers, who have seen fuel prices plunge over the past few weeks, and might have been hoping for lower shipping prices in turn. The problem is that FedEx hasn't been increasing its prices in pace with the higher fuel prices before the drop, and diesel prices haven't dropped as much as regular gasoline. Most FedEx vehicles require diesel fuel. FedEx says that its price increases will be somewhat offset by a new formula for fuel surcharges, which should reduce these charges by about 2%.
It hasn't been long since FedEx competitor DHL announced that it would cut its entire Express service in the United States, a move that could give FedEx a huge boost right at its busiest time of year. Will it be enough for the shipping giant to back off on some of its price hikes? Probably not at first, anyhow, because DHL is in negotiations with UPS to contract out some of its services. Still, this isn't exactly bad news for FedEx. Once the dust settles from DHL's American dissolution, maybe FedEx will be in better shape, and we can always hope the shipping rates get cheaper...
Again, the new rates don't take effect until next year, so you'll still be able to get all your online holiday orders and gift mailing done at the current prices.
FedEx announces 2009 rate hikes