FedEx will raise rates for delivery
By Joe Miller
Bloomberg News Service
MEMPHIS, Tenn. — FedEx Corp., the largest overnight-delivery company, will raise 2003 rates an average of as much as 3.9 percent, after rival United Parcel Service Inc. announced similar increases earlier this month.
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Rates as of Jan. 6 will rise an average 3.5 percent at the FedEx Express air-shipment unit for service within the United States and for U.S. exports, spokesman Steve Barber said. The increase for FedEx Ground, which delivers packages by truck and includes a home-delivery service, will average 3.9 percent. The FedEx increases are the same for Hawai'i.
Federal Express will raise its ground delivery charges an average of 3.9 percent and its air freight rates slightly less. Those increases apply to Hawai'i as well.
United Parcel Service customers in Hawai'i were spared UPS' recent increases for the second year in a row, said Mike Sasaki, the company's district sales manager.
Rates will stay the same for Hawai'i customers shipping within the islands and to the Mainland, Sasaki said. Hawai'i customers, however, will see the same 2.9 percent rate increase for international shipments, Sasaki said.
Sasaki said he has worked with regional and corporate officials with UPS to convince them that Hawai'i businesses are struggling with a sluggish economy.
UPS, the world's largest package delivery company, on Nov. 8 announced its largest increases in 13 years, in part to help pay for a new Teamsters contract.
FedEx plans to spend $1.8 billion during the next six years to expand its ground-delivery unit to compete with UPS.
FedEx said the express increase includes surcharges for delivery areas that rise to $1.75 from $1.50 and for Saturday pickup and delivery that go to $12.50 from $10.
The Memphis, Tenn.-based company's annual increase for this year averaged 3.5 percent for the express and ground units, Barber said. In FedEx's first quarter, ended Aug. 31, the express unit accounted for $3.93 billion in sales, 72 percent of the $5.45 billion total revenue. The ground unit's sales were $826 million, 15 percent.
FedEx shares rose 43 cents to $52.80 at 4:16 p.m. in New York Stock Exchange composite trading. The stock has risen 1.8 percent this year.
Advertiser staff writer Dan Nakaso contributed to this report.
