FedEx Freight Announces General Rate Increase

MEMPHIS, Tenn., -- FedEx Freight will implement a 5.9 percent general rate increase effective June 14, 2004. The increase will apply to interstate and intrastate traffic, and selected shipments between the United States and Mexico and Canada. Various additional adjustments will include select minimum and accessorial charges as well as some select lanes and service areas.

FedEx Freight is a leading U.S. provider of regional and inter-regional less-than-truckload (LTL) freight services and a subsidiary of FedEx Corp. [NYSE: FDX].

"FedEx Freight is committed to meeting the needs of the marketplace with fast, reliable LTL service throughout your region and across the U.S. To that end, during the past year, we made significant investments in our technology, added strategic service centers, and expanded our fleet with more than 1,800 new tractors and trailers. Going forward, we will continue to invest in key elements of our infrastructure to provide the level of service our fast cycle logistics customers require," said Dennie Carey, senior vice president, marketing, FedEx Freight.

Carey noted that some of these investments carry higher costs than in the past. In particular, the EPA-compliant engines of today are more expensive to acquire and operate than their predecessors. Further, with additional EPA requirements slated for 2006, 2007 and 2010, this trend is likely to continue.

Carey also cited rising health care costs, insurance premiums and liability requirements, as well as greater costs for security, as factors affecting the company*s costs.

Customers may access rate quotes online at www.fedexfreight.fedex.com. After June 14, the new FedEx Freight base rate and rules tariffs will be available on the company*s Web site.

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