FedEx’s 2022 General Rate Increase, announced as taking effect on January 3, 2022, packs a punch and comes in multiple rounds of increases.
November 1, 2021:
Effective November 1, 2021, the fuel surcharge for FedEx Express, Ground and Freight shipments will increase 1.75 points. This is the second increase of the year. The last increase for fuel was on June 21st of this year.
January 3, 2022:
Most of the 2022 rate increase comes into effect in this wave of the increases, however there are still significant impacts which follow.
Overall, the GRI for this year has been announced as an average of 5.9% for FedEx Express, Ground and Home Delivery services, which is greater than the 4.9% shippers have become accustomed to the past several years.
The Ground Minimum is increasing by nearly 7% and lightweight ground packages weighing from 1lb. to 5lbs are also taking on increases over 6%.
Surcharges are also under serious upward pressure this year. For the common Residential and Delivery Area surcharges, increases range from a low of 7% on the Residential Surcharge for U.S. Express Services to a high of 61% on the Delivery Area Surcharge Extended for Ground Economy and most range from 9%-12%.
I typically breakdown the surcharge increases, however this year I think it is best to refer to the surcharge chart from FedEx for more specific review and application of their relative impact to each organization
January 17, 2022:
On January 17th of the coming year there are numerous additional changes coming:
- FedEx Freight will charge a No Shipment Tendered fee for pickups executed when no freight is tendered
- For International Express Freight and Parcels, an Out-of-Area Delivery and Out-of- Area Pick Up surcharge will apply
- FedEx Ground Economy (formerly SmartPost) will now be assessed a $1.00 surcharge for all packages being delivered or returned. It appears this will be a stand alone surcharge so that discounts do not apply and so the surcharge can work independently of the rates themselves and in differing increments of increase.
January 24, 2022:
And to finish the list of increases currently pending for FedEx small parcel, January 24th also comes with a hefty set of increases on Additional Handling and Oversize packages.
FedEx is matching the shift that UPS made in 2021 to zonal surcharges for these types of packages, though FedEx will have four zones that will apply vs. three for UPS. This means the farther theses packages travel, the higher the surcharge.
Zone 2 packages increase up to approximately 5%, however Zone 7 & 8 Additional Handling and Oversize packages will increase from roughly 24% to 38%, per the new guidelines.
As is the case every year, shippers must carefully analyze the increase on their specific shipment characteristics and this year it is even more critical to do so.
If you would like assistance in determining your specific impact or have questions about the increase, please reach out to info@alexandrettaconsulting.com.