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FedEx Rises on Plan to Raise Shipping Rates, Add Surcharges

FedEx says the price increase reflects cost increases due to the current operating environment.

Shares of FedEx (FDX) - Get FedEx Corporation Report are higher after the shipping giant said that starting Jan. 3 it would be raising its rates for FedEx Express, FedEx Ground and FedEx Freight. 

FedEx Express shipping rates will increase by an average of 5.9% for U.S. domestic, U.S. export and U.S. import services. 

FedEx Ground and FedEx Home Delivery shipping rates will also increase by an average of 5.9%, as will FedEx Freight shipping rates for customers who use FXF PZone and FXF Ezone. They'll rise 7.9% for customers who use FXF 1000 and 501. 

FedEx shares at last check were 0.8% higher at $252.88.

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The company also said that effective Nov. 1, a fuel surcharge will be applied to FedEx Express, FedEx Ground and FedEx Freight shipments. 

Starting Jan. 17, FedEx Freight will introduce a no-shipment-tendered surcharge. This applies when a pickup is performed and no shipment is tendered to the carrier, the Memphis company said.

Also on that date, the company will initiate surcharges for international out-of-delivery-area and international out-of-pickup-area.

A delivery-and-returns surcharge will be placed on packages that are delivered or returned using FedEx Ground Economy services.

The company says the changes reflect cost increases associated with the current operating environment, which has been disrupted by the Covid-19 outbreak and subsequent lockdowns.