Additional Handling Surcharge to exceed 21%
FedEx announced their 2023 General Rate Increase on September 22 nd to be Effective January 2, 2023. Overall, FedEx Ground, Home Delivery, Express, and WW International rates, will increase an average of 6.9%. An additional percentage point higher than 2022 increase of 5.9%. Accessorials, fees, and surcharges will see similar increases as last year with some products as high as 24%. Both Ground Economy (formerly known as SmartPost) and Ground Multi-Weight service increases have yet to be posted. We will update our clients as soon as information is made available.
For over 30 years AFMS has helped over 3000 clients benchmark and help negotiate better shipping contracts. With over 500 years of combined transportation industry experience, AFMS has a Global team of former carrier Executives & Pricing Directors from major shipping carriers/forwarders such as UPS, FedEx, DHL, TNT, CEVA, LTL/FTL. Bring this experience directly into your company and let us help you mitigate the impact of these increases and reduce your shipping costs.
GROUND
The 1 LB Zone 2 rate, also knows as the Ground Minimum, has increased 7.91%, up from $9.36 to $10.10. This bests last year’s increase of 6.85%.
Lightweight packages (1-10 LB range) will experience an increase ranging 6.4%-7.91%. Shorter Zones (2-4) receiving slightly less than the Longer Zones (5-8). The difference between 2022 average increase (5.9%) vs 2023 increase (7.07%) would mean another 19.8% upcharge (YOY).
Let’s look at an example: 1 LB, Zone 8, Home Delivery package to a rural destination.
2022: $25.03: Base rate ($11.84), HD Surcharge ($4.75), DAS ($4.80), plus fuel ($3.64) at 17.0%.
2023: $27.13: Base rate ($12.74), HD Surcharge ($5.15), DAS ($5.30), plus fuel ($3.94) at 17.0%.
An increase of 8.39% for the same package 2023 vs 2022! (FSC assumes same % for comparison purposes)
For additional details or no cost cell by cell rate impact analysis, please contact AFMS at (800) 246-3521 or email us at [email protected].
EXPRESS & INTERNATIONAL
Priority Overnight and Standard Overnight shorter zone packages will see increases closer of 8.5%, while the longer zones will see increases of slightly lower this year averaging closer to 7.35%. Both 0f which are above the announced increase of 6.9%.
Two Day Air increases will range from 7.55% (Envelopes) to 7.64% (packages). Application of increases will be consistent. Slightly higher than the announced GRI of 6.9%.
Express Saver will see another overall increase of close to 10%, while longer zones (305-308) will experience closer to a 12% hit. Both over and above the 9.9% average increase imposed in 2022.
FedEx International Priority will see increases (averaging 9%) while FedEx International Economy Import services will see increases (averaging 3.44%-6.51%). Specific impact of these changes will depend on zone/product.
KEY ACCESSORIAL CHANGES
- Additional Handling: Increases will depend on both element and zone:
- AHS via Dimension (16.2%-21.3%)
- AHS via Weight (14.2%-14.8%)
- AHS via Packaging (16.6%-17.8%)
- Address Corrections:
- Increase an additional $1.50, 7.69% up to $21.00 per occurrence.
- Oversize Charges:
- Ground/Express packages will incur additional increases ranging from 22.7% to 24.1%.
- Home Delivery packages won’t fare much better with increases ranging from 17.6% to 18.5%.
- Delivery Area Surcharge: Increases across the board.
- DAS Commercial: Increases 4.23%-9.76%.
- DAS Home Delivery: Increases 5.77%- 10.42%.
- Home Delivery Residential Surcharge:
- Increases 8.42% from $4.75 to $5.15.
- Express Residential Surcharge:
- Increases 9.43% from $5.30 to $5.80.
- Ground Unauthorized Package Charge:
- Increases 12.20% from $1,025 to $1,150.
For additional details or NO COST rate impact analysis, please contact AFMS at (800) 246-3521 or email us at [email protected].
