As the company gets ready for a future with bleaker package demand, package delivery company FedEx (FDX) -) is doing what it can to position itself better in 2024.
The company on Tuesday announced that it is raising shipping rates and customs clearance service fees on imports.
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Starting Jan. 1, 2024, the company will increase shipping rates for U.S. domestic, export and import services by an average of 5.9%. The company is also raising rates for its Ground and Home Delivery unity by 5.9%.
FedEx Freight shipping rates will increase by between 5.9% and 6.9% depending on how expensive it is for FedEx to ship the freight.
FedEx says it is making the changes to "reflect incremental costs associated with the current operating environment."
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Starting Jan. 15, the company will also start charging an additional handling surcharge and oversize charge per eligible package for international multi-piece shipments. Previously one item that needed to be shipped in pieces only faced one charge, now each individual piece will have the surcharges.
In June, FedEx reported stronger-than-expected fourth quarter earnings. But it also issued a muted profit forecast for its coming fiscal year, amid what it described as ongoing demand weakness and input cost inflation.
FedEx said it sees revenue growth that is flat to last 2023 levels, or growing at a low single-digit pace.
“We’re approaching fiscal 2024 with the same level of intensity, maintaining a continued focus on improving profitability to position the company for success in what remains a challenging demand environment," said CFO Michael Lenz.
During the previous fiscal year, FedEx cut nearly 30,000 jobs, retired 18 planes, and closed offices as part of a cost cutting strategy that it unveiled last year.
The company hopes to cut at least $4 billion in costs by the end of the fiscal 2025 year.
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