FedEx Blames Tight Labor Market for Higher Costs

FedEx will raise rates in January, it announced Monday, but it is also raising the fuel surcharge on November 1, 2021.

You might think a fuel surcharge is tied directly to the price of fuel, but upon closer scrutiny, it’s not quite that simple: “The tight labor market and ongoing shifts in volume have created the need for frequent network adjustments and the repositioning of aircraft, vehicles, and other equipment on a regular basis. This has increased our total fuel consumption,” the carrier said.

FedEx will apply the fuel surcharge increase to FedEx Express (domestic package and freight services), FedEx Ground, and FedEx Freight shipments, and it said it would continue to evaluate the fuel surcharge “as the market dynamics continue to shift.”

FedEx also said it would raise shipping rates on January 3, 2022:

• FedEx Express shipping rates will increase by an average of 5.9% for U.S. domestic, U.S. export, and U.S. import services.
• FedEx Ground and FedEx Home Delivery shipping rates will increase by an average of 5.9%. FedEx Ground Economy shipping rates will also increase.
• FedEx Freight shipping rates will increase by an average of 5.9% for customers who use FXF PZONE and FXF EZONE, and by 7.9% for customers who use FXF 1000 and 501. This change applies to shipments within the U.S. (including Alaska, Hawaii, Puerto Rico, and the U.S. Virgin Islands) and between the contiguous U.S. and Canada. FedEx Freight shipping rates will also increase for shipments within Canada, within Mexico, and between the contiguous U.S. and Mexico.

The company also announced several surcharge changes for FedEx Express, FedEx Ground, FedEx Ground Economy, and FedEx Freight that will take effect in the coming months.

You can find Monday’s press release on the FedEx.com website.

Ina Steiner

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.