FedEx Corp. will boost most prices by an average of 4.9% starting in January, more than double the expected rate of U.S. inflation next year, as freight demand surges.
Freight rates will rise 5.9%, higher than the company’s other businesses as a trucker shortage and strong U.S. industrial growth create a tight shipping market for large cargo. FedEx Express prices will increase 4.9% as will rates for home delivery and ground transportation, the shipper said in a statement Nov. 5.
Marc McAndrews/Associated Press
FedEx’s ability to boost prices at a higher rate than inflation is crucial for the company to expand profit margins. U.S. consumer prices are expected to rise 2.3% in 2019, according to the average expectation from 72 economists surveyed by Bloomberg.
The Memphis, Tenn.-based company’s increase, which takes effect Jan. 7, is comparable with last year’s average rise of 4.9%.