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FedEx to raise shipping rates in January

Costs are going up between 4.9 and 5.9 percent

Photo (c) fotograv - Getty Images
More consumers are shopping online, not just at Amazon but at brick and mortar retailers too. But getting those packages delivered is going to cost more.

FedEx has announced an increase in shipping rates for FedEx Express, FedEx Ground, and FedEx Freight starting January 7.

The company is increasing rates for FedEx Ground and FedEx Home Delivery an average of 4.9 percent for both domestic and export/import services. It's raising FedEx Freight shipping rates an average of 5.9 percent.

“This rate change applies to eligible FedEx Freight shipments within the U.S. (including Alaska, Hawaii, Puerto Rico and the U.S. Virgin Islands), between the contiguous U.S. and Canada, within Canada, between the contiguous U.S. and Mexico, and within Mexico,” the company said in a statement.

Also included in the rate adjustment are changes to shipping surcharges and fees, FedEx retail rates, and FedEx One Rate pricing.

USPS rate hike

The FedEx rate hikes come on the heels of an announcement by the U.S. Postal Service (USPS) that it's increasing the price of first class postage from 50 cents to 55 cents, effective in January. USPS has recently lost money on first class postage while its package delivery service has continued to be profitable.

The FedEx rate hikes may or may not affect consumers shopping online, at least not directly. Increasingly online merchants provide free shipping on most orders and have a hard time passing on the shipping costs by raising their retail prices.

While FedEx's rate hikes won't affect Amazon this holiday season it will make the online retailer's latest promotion more expensive next year. This week Amazon announced it is offering free shipping to everyone – not just Prime customers – and without a required minimum purchase.

As shipping costs increase, consumers should always take advantage of free shipping offers. It may mean waiting until your complete order reaches the minimum threshold to qualify for free shipping.

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