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FedEx 2015 GRI

On September 16, 2014, FedEx made an announcement of its General Rate Increase effective on January 5th, 2015. FedEx announced the increase as “an average of 4.9% for U.S. domestic, U.S. export and U.S. import services.” It is important to note that this is an average and as such could mean a more significant increase for certain shipping patterns/profiles.

The following is a breakdown of the average percentage increase by service level.

Ground Service Level (Zones 2 – 8)

Weight Ranges

Average Percentage
Increase 2015

1 – 5 lbs.

6.36%

6 – 10 lbs.

5.96%

11 – 20 lbs.

5.72%

21 – 30 lbs.

5.31%

31 – 70 lbs.

3.33%

71 – 150 lbs.

1.88%

The chart above demonstrates that the lower weight packages for the Ground service level will be hit with an increase higher than 4.9%. If you are shipping between 1 to 10 lbs packages you are looking at over a 6% increase just on Ground.

Express Service Levels (Zones 2 – 8 and 1 to 99 lbs)

Service

Average Percentage
Increase 2015

FedEx First Overnight

5.49%

FedEx Priority Overnight

6.34%

FedEx Standard Overnight

6.57%

FedEx 2Day A.M.

7.38%

FedEx 2Day

7.38%

FedEx Express Saver

7.90%

The express service levels also demonstrate an increase much greater than 4.9% for packages from 1 to 99 lbs hitting a high of almost 8% with FedEx Express Saver.

Most of the Zone 2, 1 lb. rates have exceeded the announced GRI as well, which will cause a considerable cost increase for shippers hitting the minimum package charge on a consistent basis.

Service Level

2014

2015

Percentage Increase

Ground

$6.24

$6.61

5.93%

FedEx First Overnight

$52.30

$53.35

2.01%

FedEx Priority Overnight

$24.30

$25.35

4.32%

FedEx Standard Overnight

$20.70

$22.30

7.73%

FedEx 2Day A.M.

$15.76

$16.96

7.61%

FedEx 2Day

$13.70

$14.75

7.66%

FedEx Express Saver

$12.90

$13.90

7.75%

The accessorial surcharges for FedEx are also seeing an increase for 2015. Many accessorial surcharges will incur an increase, including Residential Surcharge, Delivery Area and Extended Area Surcharges, Delivery Signature charges and the Additional Handling surcharge. These increases are not factored in the announced GRI and most of them will increase at least 5%-7% with some outliers going up as much as 14%, 16% and 100%.

Surcharge

Service Level

Percentage Increase

Additional Handling

US Express & Ground

4.6%-5.9%

Address Correction

US Express & Ground

4.2%-4.6%

COD

US Express & Ground

4.2%

Declared Value

US Express & Ground

5.6%

Delivery Area Surcharge

US Express & Ground

4.1%-14.3%

Delivery Area Surcharge

SmartPost

100%-133%

Delivery Signature

US Express & Ground

5.3%-16.7%

Oversize Charge

US Express & Ground

4.6%

Residential Delivery

US Express & Ground

4.5%

Residential Delivery

Home Delivery

6.9%

sam-simpson
Sam Simpson

It is very important to remember that the change in the ground DIM rule will become effective in 2015 as well. The 3 cubic feet (5,184 cubic inches) minimum threshold for ground packages will be removed.  Currently any Ground package that measures less than 3 cubic feet does not get dimensional weight, however in 2015, all packages will be charged at the higher of actual or dimensional weight ((length x width x height) / DIM factor). This will further increase shipping costs well over the 4.9% GRI listed in the FedEx announcement.

All of these increases could have an impact of a 7%-15% (or even higher for shippers of non-dense products) increase in shipping costs for 2015. It is recommended to contact enVista to explore an in-depth analysis of your particular shipping profile to ascertain the actual impact of these increases.

If you are shipping UPS, rest assured that their General Rate Increase announcement is forthcoming and will represent similar cost increases.

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