Smith plays down European bid as rate increase confirmed
FedEx CEO Fred Smith played down the possibility of a European acquisition, as the company announced an increase in shipping rates for FedEx Express. Responding to a question posed in a Q&A session at the end of a FedEx meeting for investors today, Smith said: “We don’t have to do anything in Europe. We don’t feel in Europe there is a competitive danger or that it’s essential for us to make an acquisition.”
In recent times there has been constant speculation surrounding a FedEx bid for TNT.
Smith added: “There’s no indication to me that TNT is for sale.” If it were, he said, “we would have to get under the hood and determine if it met FedEx’s strategic objectives.”
His comments came hours after FedEx said shipping rates for FedEx Express will increase by a net average of 3.9% for US domestic and US export services from January 2011.
The full average rate increase of 5.9% will be partially offset by adjusting the fuel price threshold at which the fuel surcharge begins, reducing the fuel surcharge by two percentage points, the company has announced.
In addition, FedEx Express and FedEx Ground will implement a change to the dimensional weight volumetric divisor from 194 to 166 for US domestic services.
FedEx Freight and FedEx National LTL also will implement 6.9% general rate increases (GRI) effective November 2010. These rate increases apply to interstate and intrastate less-than-truckload (LTL) shipments, as well as shipments between the US and Canada covered by the FXF 1000 and FXNL 501 Base Rates.
FedEx Freight’s and FedEx National’s fuel surcharge will remain unchanged and one of the lowest in the LTL industry. On average, the FedEx LTL companies’ fuel surcharge is 4.5 to 6.5 percentage points below the next five largest LTL carriers.
“FedEx understands the needs of our customers and is focused on providing exceptional service,” said T. Michael Glenn, FedEx executive vice president, Market Development and Corporate Communications. “This pricing adjustment will allow for key investments that will enable FedEx to continue to provide industry leading service and shipping solutions.”
The FedEx Ground and FedEx SmartPost pricing changes for calendar 2011 will be announced later this year.
