In an effort to strengthen its profitability, FedEx Corp (NYSE:FDX) has announced its decision to implement higher shipping rates and customs clearance service fees, effective from January 1, 2024. The renowned parcel delivery company aims to bolster its financial performance through these strategic adjustments.
According to a company statement, FedEx Express is set to raise its shipping rates by an average of 5.9% for various services, including U.S. domestic shipments, exports, and imports. This increase will extend to both Ground and Home Delivery units, where shipping rates will also undergo a comparable 5.9% hike.
For FedEx Freight services within the United States, the company plans to implement a slightly broader rate adjustment, with shipping rates rising by an average ranging from 5.9% to 6.9%. Notably, these revised rates will exclusively apply to shipments conducted within the U.S.
FedEx attributes these adjustments to the need to address incremental costs associated with the prevailing operational landscape. This move aligns with the company’s overarching strategy to enhance profitability. In the previous year, FedEx, headquartered in Memphis, Tennessee, unveiled a comprehensive cost-cutting plan aimed at achieving a reduction of $4 billion in costs by the culmination of its 2025 fiscal year.
To achieve these cost-saving goals, FedEx executed various measures in the prior fiscal year. This included the elimination of approximately 29,000 jobs, the retirement of 18 aircraft, the closure of offices, and a strategic reduction in Sunday deliveries, which were negatively impacting profitability.
With these forthcoming rate and fee adjustments, FedEx anticipates positioning itself on a trajectory of improved financial performance, solidifying its stance as a prominent player in the competitive parcel delivery industry.
Featured Image: Unsplash @ Bannon Morrissy
Author Faith Yakubu 
