FedEx Price Increase: Will It Cost You More To Ship During The Holidays?

With a price increase announced by FedEx Corporation (FDX) this week, shipping your packages through the carrier will get a little more expensive come 2019. While the spike in shipping rates will not affect the 2018 holidays, consumers can expect to pay more come Jan. 7, 2019.

FedEx announced the change in rates for its FedEx Express, FedEx Ground, and FedEx Freight subsidiaries. Shipping rate increases will rise with these service carriers by an average of 4.9 percent, according to the company.

The average 4.9 percent increase will also hold for FedEx Ground and FedEx Home Delivery services. The company also said that is increasing the rates of its FedEx SmartPost.

Consumers will also feel the pinch for freight shipments as the company said it will increase shipping rates by an average of 5.9 percent. This rate will apply FedEx Freight shipments within the U.S., between the adjoining states of the U.S. and Canada; within Canada, the contiguous U.S. and Mexico; and within Mexico.

The shipping rate price changes match the 2018 increase that was put into effect earlier in the year. FedEx reported that the shipping rate increase was due to higher fuel costs. In 2018 the company experienced a 40 percent increase in its fuel costs compared to the previous year, according to CNN Business.

Also affecting the price hike is an added labor cost the company is facing – up 11 percent this year, according to CNN Business. The company has reported a shortage of truck drivers and increased volumes for online shopping have made it a challenge to keep up with shipping demands. FedEx expects the four Mondays during the holidays to be the busiest shipping days the company has ever seen.

FedEx is not alone with its shipping rate increase as, according to CNN Business, the U.S. Postal Service is looking to increase prices for Priority Mail boxes by an average of 5.9 percent. While the rate increase has not been approved as of yet, the increase is expected to take place in January.

UPS has not yet announced its 2019 shipping rate increase.

The stock price for FedEx was up over 1 percent on Tuesday afternoon.