FedEx increases overnight prices
The price of sending a FedEx package overnight will take its biggest leap since 2001 when new prices go into effect in early January.
The customers who will notice it most are small businesses and walk-up customers at FedEx Kinko’s who don’t get contract discounts.
FedEx announced a 4.9 percent increase Friday on packages shipping overnight within the United States and to foreign countries.
“These rate increases will allow FedEx to continue making the necessary investments in our business so we can continue to give our customers a superior shipping service,” said FedEx executive Mike Glenn.
Increases and fuel surcharges for FedEx Ground will be announced later.
The company also said customers exporting goods to the United States will pay U.S. dollar rates, removing the uncertainties caused by currency fluctuations.
The hike was higher than analysts expected. Morgan Stanley said it signals that customers are still willing to pay a premium for overnight delivery despite a tide of rising economic concerns.
Morgan Stanley surveys suggested the hike would be more modest.
“We should caution that FedEx and UPS seldom get the full announced rate increase, as a significant amount of discounting takes place,” analyst William Greene said in a research note.
He expects UPS will follows FedEx’s lead.
Satish Jindel, transportation consultant in Pittsburgh, doubts customers will balk.
For one thing, he said, improvements in ground shipping networks mean that fewer people need express delivery.
Because the parcel carriers have added other “value-added services,” including letting customers trace package movement on the Internet, most people, he said, “will find the total value proposition high enough to offset the extra cost.”
