FedEx Freight and Estes Express Announce Rate Hikes

Customers of FedEx Freight and Estes Express who were wondering if the less-than-truckload carriers planned a general rate increase to match previous rate hikes from its competitors need wonder no more: FedEx Freight will implement a 6.75% general rate increase effective Sept. 6, 2011, while Estes’ 6.9% price hike goes into effect August 8, 2011.

Other LTL carriers, such as ABF, Con-way Freight, UPS Freight and YRC, had previously announced rate hikes of 6.9%, so FedEx Freight’s increase is slightly less than its competitors.

For FedEx customers, the 6.75% rate increase applies to FedEx Freight shipments within the contiguous U.S., between the contiguous U.S. and Canada, and within Canada. The rate for cross-border FedEx Freight shipments between the U.S. and Mexico will also increase 6.75% for only the U.S. portion of the shipment, and will be effective Sept. 6, 2011. This rate increase for FedEx Freight applies to shipments covered by the FXF 1000 and FXF 501 series base rates. Additional changes will include absolute minimum charges and accessorial rates and charges. The FedEx Freight fuel surcharge will remain unchanged.

Explaining the need for the 6.9% general rate increase, Paul Dugent, vice president of pricing with Estes Express, explains, “Equipment costs have skyrocketed in 2011, spurred by higher prices for raw materials such as metal, lubricants and rubber. For example, in just the past two months, tire prices have increased up to 22%. And when you have well over 200,000 tires on the road every day, this adds up quickly. Premiums for basic healthcare and other insurance benefits have also risen dramatically due to legislative mandates. However, providing a comprehensive benefits package is necessary for hiring and retaining quality personnel.”

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