FedEx's package and freight shipping rates will increase by an average of 5.9% on Jan. 6, 2025, the delivery giant announced Friday.
The move affects standard list rates for U.S. deliveries, as well as exports from and imports into the country. Ground Economy, Ground Multiweight, International Premium, International Priority DirectDistribution, Freight Priority and Freight Economy rates are among the services that will also see prices increase.
FedEx is raising many of the fees it applies to certain packages, as well. This includes higher charges for residential deliveries, deliveries to certain ZIP codes and packages that require additional handling.
"Overall, these changes will require businesses to carefully evaluate their shipping strategies, particularly those dealing with heavier packages, residential deliveries, and rural destinations," said Brandon Staton, founder of Shipmint, in a LinkedIn post. "E-commerce shippers using Ground Economy services will need to keep a close watch on how the increases in both minimum charges and surcharges impact their shipping costs."
The incoming increase, which FedEx rolls out annually, mirrors the 5.9% average hike it levied at the start of 2024. FedEx said on its website that the adjustments will allow it to invest in its business and maintain reliable service.
FedEx's two-day air services will see higher rate increases than average, Adi Karamcheti, consultant for professional services at Shipware, said in an emailed analysis of the changes. Some shippers may try to avoid the price hike by going with ground delivery instead, but ground services will see a greater increase for longer-distance deliveries.
"With greater emphasis on meeting a two-day delivery commitment that has been commonplace in the market, it seems FedEx thinks they can get shippers to pay more to get things delivered before the third day," Karamcheti said.
Rival UPS has not yet announced its 2025 rate changes. Both carriers are navigating a softer demand environment than the heights of the COVID-19 pandemic, giving shippers leverage in negotiations that have led to deep shipping discounts despite annual rate increases.
"Never accept what the big two offer as pricing concessions as the final say," Karamcheti said. "Make sure that you do actually negotiate with them. You'll be surprised at how well you can do if you are willing to hold firm."
