Effective January 4, 2021, FedEx Express (Domestic, US Export and US Import), FedEx Ground, and FedEx Home Delivery shipping rates will increase by an average of 4.9%, while FedEx Freight will increase rates by an average of 5.9%. FedEx SmartPost, Ground Multiweight, and International Premium rates will also increase, but FedEx has not specified those increases. FedEx One Rate and Retail Rates will also change. The company also said that its list of delivery area surcharge U.S. ZIP codes for FedEx Express, FedEx Ground, and FedEx SmartPost are also set to change, beginning on January 4, 2021
Historically, FedEx was not a stickler for late payment fees, but shippers used to paying a few days late will be faced with charges. New for 2021, FedEx will charge 6% late payment fees. This is commensurate with current UPS late payment fees. Shippers that have trouble paying within the standard 15-day window are advised to negotiate longer terms.
In addition to late fees, FedEx will add further surcharges on large packages. The new dimensions for Additional Handling fees are effective January 18th, 2021 and are as follows:
- Fee is charged when Length + Girth is equal to or greater than 105”
- Girth is calculated as (2 * Height + 2 * Width)
The FedEx Ground minimum package charge has increased by 6.44% to $8.76. Low weight Ground packages will see an increase of greater than 6% increases for the 1-5lb weight bucket. Increases will be different based on negotiated minimum charges and discounts.
Example: a shipper with a 30% 1-5lb discount shipping a 4lb, zone 5 package would mean a 7% increase ($0.60 per package) on that shipment’s transportation fee.
Two-day and three-day shipments will take larger increases, most likely due to the “Amazon effect.” FedEx needs to compete with Amazon’s faster shipping and requires additional compensation when shippers need faster-than-ground express services. In addition, longer zones have larger increases than shorter zones for express services. This trend continues from last year and will generally affect shippers with one coastal distribution center more significantly.
Surcharges have increased by more than the announced 4.9% for most of the high frequency items, and Deliver Area Surcharge (DAS) ZIP Codes have also changed. More ZIP Codes are considered standard DAS and less are considered extended DAS when compared to 2020.