October 25, 2022 •Chase Flashman
FedEx announced that it would be increasing its rates by 6.9%, effective January 2, 2023. This is their largest general rate increase (GRI) in history, following a 4.9% annual increase from 2012-2021, and a 5.9% increase for 2022 citing Covid for the hike.
FedEx EVP and Chief Customer Officer, Brie Carere, stated that this increase is "their response to inflationary pressures on our costs" and FedEx saw lower than expected package volume for this past quarter and fiscal year.
To account for the lower package volume, FedEx is consolidating its "package sortation operations, deferring or canceling Ground facility projects and reducing linehaul expenses" to reduce costs by up to $2.7 billion in fiscal year 2023.
About the GRI:
2023 Standard List Rates
Effective Jan 2, 2023
Rates are increasing exponentially by zone distance
Rates are increasing more for the longer zones (6-8) than for the closer ones.
For the full list visit FedEx.
2023 Changes to Express and Ground Surcharges & Fees
Effective Jan 2, 2023
| Surcharge | Service | 2023 Rate | % Increase YOY |
| Additional Handling | U.S. Express Package Services, U.S. Ground Services |
Dimension: Zone 2: $18.50 per package |
17.5% |
| Address Correction |
U.S. Express Package Services, International Express Package Services, International Express Freight Services, U.S. Ground Services, International Ground Service |
$21 per correction |
7.7% |
| Home Delivery | FedEx Home Delivery |
$4.10 per shipment (Date Certain) $9.25 per shipment (Evening) $21 per shipment (Appointment) |
7.9% 6.9% 7.7% |
| Ground Unauthorized | U.S. Ground Services, International Ground Service |
$1,150 per package | 12.2% |
| Inside Pickup/Delivery Charge | U.S. Express Freight Services | Greater of $132.50 per shipment or $0.087 per lb. | 7.4% |
| Oversize Charge | FedEx Home Delivery | Zone 2: $160 per package Zones 3–4: $170 per package Zones 5–6: $190 per package Zones 7+ : $200 per package |
18.5% 17.2% 18.75% 17.6% |
| Residential Delivery | FedEx Home Delivery | $5.15 per package | 8.4% |
For the full list of surcharge changes visit FedEx.
2023 Delivery Area Surcharge changes
Effective Jan 30, 2023
UPS introduced this for 2022, and FedEx is following suit for 2023.
Almost 4,000 zip codes in the contiguous United States will see a $13.25 fee added for any delivery starting January 30, 2023.
For the full list of affected zip codes click here.
Frequently Asked Questions About FedEx Rate Increases
What is a general rate increase in shipping?
A general rate increase (GRI) is an across-the-board rate adjustment that carriers like FedEx apply annually to their published standard list rates. FedEx's 2023 GRI of 6.9% is the largest in the company's history, surpassing the 5.9% increase applied for 2022. Prior to recent years, FedEx held its annual increases to 4.9% from 2012 through 2021.
How much is FedEx raising rates in 2023?
FedEx is raising rates by 6.9% for 2023, effective January 2, 2023. Zone-based increases are not uniform: longer-distance zones (6-8) are seeing larger rate increases than shorter zones. Individual surcharges are rising by even more, with Additional Handling fees up 15-17% and Oversize charges up 17-18% year over year.
Which FedEx surcharges are increasing the most for 2023?
Oversize charges are increasing between 17.2% and 18.75% depending on zone, while Additional Handling fees are rising 15.4% to 17.5% by zone. By comparison, Address Correction and Residential Delivery surcharges are increasing 7.7% and 8.4% respectively, closer to the headline 6.9% GRI.
What is the FedEx delivery area surcharge change for 2023?
Starting January 30, 2023, FedEx is adding a $13.25 fee for deliveries to approximately 4,000 zip codes in the contiguous United States. This delivery area surcharge expansion follows a similar move UPS made in 2022. The full list of affected zip codes is published on the FedEx website.
Why is FedEx raising rates by a record amount in 2023?
FedEx cited inflationary pressures on operating costs as the primary driver of the 6.9% increase. The company also reported lower-than-expected package volume for the prior quarter and fiscal year, compounding the financial pressure. To offset costs further, FedEx is consolidating sortation operations, deferring Ground facility projects, and reducing linehaul expenses to cut up to $2.7 billion in fiscal year 2023.