FedEx to Raise Package Rates Feb. 1

December 27, 2000 9:30 AM, EST

Package-delivery giant FedEx Corp. (FDX) said Wednesday it will hike rates that it charges for U.S. shipments by an average of 4.9%, effective Feb. 1. FedEx added that U.S.-origin export shipments will see rates rise by an average of 2.9%.

A FedEx official said the rate hike ensures that the company will continue to provide the type of service its customers expect, backed by the company’s investment in what it called “user-friendly technology.” The company noted that it last moved its rates during 1999.

The past year has seen the freight-handling and hauling industries beset by big jumps in fuel costs, on top of a yearlong upward push on interest rates by the Federal Reserve that boosted debt-service costs on equipment loans.

Yet many carriers have been squeezed and unable to pass along all their higher costs, as the economic slowdown and higher energy bills also cut into trucking customers’ profits and cooled the growth in freight activity.

A significant rate hike by a carrier as large as FedEx could set the stage for broader rate increases across the freight-hauling sector.