FedEx Freight will hike general rates by 6.75 per cent from September 6, one month after rival UPSFreight introduced a 6.9 per cent rate increase.
FedEx’s US trucking subsidiary will implement a 6.75 per cent general rate increase (GRI) onshipments within the contiguous USA, between the contiguous USA and Canada, and within Canada. Therate for cross-border FedEx Freight shipments between the USA and Mexico will also increase by 6.75per cent but for only the US portion of the shipment. The rate increase applies to shipmentscovered by the FXF 1000 and FXF 501 series base rates. Additional changes will include absoluteminimum charges and accessorial rates and charges.
But FedEx Freight’s fuel surcharge will remain unchanged. The company claims its surcharge isone of the lowest in the LTL industry, and was at least 22 per cent lower than the next six largestLTL carriers’ published fuel surcharge rates based on the average national price of diesel fuel asof July 27, 2011.
FedEx Freight secured a financial turnaround in the fourth quarter ending May 31, 2011. Ithad operating income of $42 million, up from an operating loss of $36 million a year ago, thanks toa 13 per cent LTL yield rise. Its revenues rose 6 per cent even though volumes dropped 8 per centas a result of yield management actions.
The rates increase follows that of rival UPS Freight which put up rates by 6.9 per cent fromAugust 1. This covered non-contractual shipments in the United States, Canada and Mexico, applyingto minimum charge, LTL rates and accessorial charges. UPS Freight justified the increase byhigher operating costs, including fuel, and fleet investment.
Other major US trucking companies, including YRC Worldwide, Con-Way Freight and ABF FreightSystem, also put up prices by 6.9 per cent over the last few weeks. The increases are generallyseen as an effort to improve yields after heavy price-cutting in recent years.
