In a move that surprised absolutely no one, FedEx (FDX) on Thursday announced that its shipping rates will rise in 2010. The only real shocker in the release is the amazing degree to which the hike echoes that of rival carrier UPS (UPS), which announced its increase in late November.
UPS will increase its shipping on its ground packages by 4.9%. And so will FedEx.
On the other hand, while UPS is also raising Air Express and U.S.-origin international shipment rates by 4.9%, FedEx is radically departing from the model set by its competitor: It's raising air express rates by 5.9%.
If the similarity between the basic rate increases isn't suspicious enough, look at the massive, strangely similar increases in surcharges that both FedEx and UPS have instituted. UPS is hiking charges for 22 services; FedEx is upping 21.
But at least the increases are different, right? Well, not quite. UPS's address-correction charge for ground service is going up by $2 -- and so is FedEx's. But FedEx is only increasing its address correction fee on air services by $1...and, oddly enough, so is UPS.
The same goes for a host of other fees, including COD charges ($1 increase at both carriers) and the hazardous-materials charge, which both are jacking up by $2.50.
The eerie parallels seem odd, given the ongoing and highly public battle between the shipping behemoths. UPS and FedEx have spent millions to convince consumers that the companies offer radically different services. They've even carried their fight into the halls of Congress, where a UPS-promoted attempt to reclassify FedEx would make it easier for its workers to unionize.
Of course, some similarity in rate increases is natural; for all their supposed rivalry, the two carriers have to deal with many of the same pressures. An increase in fuel costs or a sluggish stock market affects them the same way and inspires similar responses. But that doesn't explain why the surcharge fees are so similar. Or, to put it another way, why are they each charging an extra quarter for signature verification in the new year? Has the cost of paper spiked? Has there been a run on UPS's little brown tricorders? Maybe someone cornered the market on pens.
Another possible explanation is that UPS and FedEx somehow decided, completely independently, that the public will bear an increase of exactly 25 cents in charges for signature verification. And if you believe that, then these shippers have a package to sell you.
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