FedEx Corporation (FDX – Free Report) will increase shipping rates early next year due to rising costs associated with a “challenging operating environment.” It would also allow the company to serve its customers more efficiently through its continued investment in service improvements, fleet maintenance, technology innovations, and more, FedEx said.
Effective January 3, 2022, the company will increase shipping rates for its Express, Ground and Freight divisions. FedEx Express shipping rates for US domestic, export and import services will increase by an average of 5.9%. FedEx Ground and Home Delivery shipping rates will also increase by an average of 5.9%. FedEx will also increase its Ground Economy shipping rates.
FedEx Freight shipping rates will increase an average of 5.9% for customers using FXF PZONE and FXF EZONE, and 7.9% for those using FXF 1000 and 501. This rate increase will be taken from shipments to the United States (including Alaska). , Hawaii, Puerto Rico and the US Virgin Islands) and between the contiguous United States and Canada. Freight shipping rates will also be increased for shipments within Canada, Mexico, and between the contiguous United States and Mexico.
In addition to the shipping rate increases, FedEx is revising the surcharges for its Express, Ground, Ground Economy and Freight units. Effective November 1, 2021, the company will increase the fuel surcharge on its FedEx Express US, FedEx Ground and FedEx Freight domestic package and freight services. Effective January 17, 2022, FedEx Freight will levy a non-delivered shipment surcharge, which will apply when a pickup occurs but no shipment is tendered to the carrier. There will be changes to international out-of-delivery area and out-of-international pickup area surcharge rates, delivery and return surcharge rates (when using FedEx Ground Economy services), and additional handling and oversize surcharge for US Express Package Services and US Ground Services, starting next January.
Zacks ranking and key picks
FedEx carries a Zacks Rank #3 (Hold). Some higher-ranked stocks in the broader transport sector are Matson (MATX – free report), Echo Global Logistics and ArcBest Corporation (ARCB – Free Report), each sporting a Zacks Rank #1 (Strong Buy). You can see the full list of today’s Zacks #1 Rank stocks here.
Shares of Matson, Echo Global and ArcBest are up more than 39%, 78% and 73% respectively so far this year.