FedEx Details Plans to Raise Rates Next Year

FedEx Corp. said its will raise shipping rates starting next year, including an average increase of 3.9% at its air-shipping Express division and 4.9% for its ground and home-delivery services.

The shipping giant's plan comes after rival United Parcel Service Inc. recently unveiled an average rate increase of 4.9% to help pay for system upgrades and expansion. Higher rates at UPS's freight division were set to take effect Monday, with increases across its other services targeted for Dec. 26.

Memphis, Tenn.-based FedEx also expects to increase its spending to accommodate growth in e-commerce and to update its aircraft fleet, which were reflected in its June plans to raise capital outlays for the current fiscal year by 6%.

Other planned changes unveiled by FedEx on Monday include raising freight shipment rates by 4.9% and charging customers more to ship large packages.

Starting in February, FedEx also will adjust its fuel surcharges weekly instead of monthly, reducing the lag time between U.S. government fuel index changes and its surcharge adjustments to two weeks from two months.

FedEx plans to release its fiscal first-quarter results on Tuesday.

Write to Tess Stynes at [e-mail]

(END) Dow Jones Newswires

September 19, 2016 18:05 ET (22:05 GMT)

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