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What Sellers Should Know about FedEx Rate Increase

Like death and taxes, the rising cost of shipping is a certainty for online merchants. Right on cue, FedEx announced its rates for 2016 are going up by an average of 4.9% for U.S. domestic, U.S. export and U.S. import services.

FedEx also announced two changes taking effect on November 2, 2015: it’s increasing surcharges for shipments that exceed the published maximum dimensions in the FedEx Ground network; and it’s updating certain fuel surcharge tables at FedEx Express and FedEx Ground.

The surcharge will rise from $57.50 to $110 and will apply to large FedEx Ground packages, such as those that weigh more than 150 pounds.

“The changes related to fuel and unauthorized surcharges are in response to changing industry demand dynamics, including increases in average package size and weight and increased residential deliveries,” the shipping carrier explained.

Sellers should look closer at the 2016 rates, as the across-the-board average doesn’t tell the whole story. Shipping vendor Shipware contributed a story to MyTotalRetail.com highlighting some of the important changes to look for – of special interest to online sellers, for example: “rates for lightweight Ground packages will increase much more significantly than heavier packages.”

According to the column in MyTotalRetail.com, actual 2016 rate increases for most Express products exceed 4.9 percent. As for ground service, a chart shows that packages weighing between 1 – 5 pounds sent FedEx Ground will rise by 5.8 percent; a package weighing 6-10 pounds will see costs rise by 5.5 percent.

Also fascinating: “The 2016 Ground minimum charge is $6.94, a 5 percent increase,” with an accompanying chart that shows the 11-year history of the minimum charge. In 2006, the ground minimum charge was $3.80.

Online sellers who ship using FedEx will want to take a look at the details of Shipware’s analysis. Others can sit back and anticipate 2016 rate changes from UPS and USPS.

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Ina Steiner
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). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.