FedEx Hikes 2024 Rates by 6 Percent, 2023 Holiday Surcharge by 100 Percent
FedEx will raise rates 6% in 2024 – or 5.9% to be exact – for FedEx and FedEx Ground, it announced on Tuesday. The rates go into effect on January 1, 2024, so sellers could be hit by higher costs for 2023 holiday returns.
It also means a 2024 effective rate hike for sellers on sites like eBay and Etsy that charge sellers not only payment processing fees, but commission fees as well, on the total transaction amount, including shipping and handling. That means the platforms make more money without having to announce a rate increase to their sellers.
FedEx tried to spin a negative into a positive, writing, “The average annual rate increases are one percentage point lower than last year’s general rate increase.”
The company had typically raised rates each year by 4.9%, but in 2022, it raised rates by 5.9%, and in 2023, it raised rates by 6.9% (and raised surcharges on rural packages).
In Tuesday’s announcement, the shipping carrier said, “The price adjustments reflect incremental costs associated with the current operating environment, while enabling FedEx to continue investing in service enhancement, fleet maintenance, technology innovations, and other areas to serve customers more effectively and efficiently.”
FedEx also published its “peak” surcharges, which used to apply only to the holiday season but has been rebranded to “demand” surcharges (effective September 4, 2023) because it began applying the charges as warranted on a year-round basis.
The rates published by FedEx show that it used to charge a $3.45 “Peak Additional Handling Surcharge” for FedEx Express and Ground packages – that jumps to $6.95 per package between October 2, 2023 and January 14, 2024. That’s an increase of over 100%.
FedEx also called out two additional changes to surcharges for FedEx Express and FedEx Ground:
- Effective January 1, 2024, FedEx will be increasing customs clearance service fees on imports.
- Effective January 15, 2024, FedEx will assess the Additional Handling Surcharge and Oversize Charge per eligible package for international multi-piece shipments, instead of per shipment. The affected surcharges are the Additional Handling Surcharge (Dimension, Weight, Packaging, Freight, and Non-Stackable) and the Oversize Charge.
The 5.9% rate increase starting in January is an average – shippers may see FedEx charges for some packages and services go up more than that, others by less – so online sellers should closely examine the rates for the services they typically use – and make any necessary adjustments, such as to product pricing for listings offering “free shipping,” and keeping in mind holiday orders returned in January will incur higher costs. (FedEx won’t share detailed rates until September 7, however.)
Shippers may incur other surcharges when using FedEx (and other carriers), so it behooves sellers to do their homework to avoid surprises. You can find today’s announcement on the FedEx website.
Ina Steiner
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