FedEx to increase shipping rates, cut costs by $2B

MEMPHIS, Tenn. — Customers can expect to pay more to ship through FedEx next year, according to the Memphis-based company.

FedEx will raise ground and express shipping rates by an average of 6.9% in January 2023, the company announced on Thursday. Freight rates will increase by an average of 6.9% to 7.9%. The company is hoping to save upwards of $2.7 billion.

“We’re moving with speed and agility to navigate a difficult operating environment, pulling cost, commercial, and capacity levers to adjust to the impacts of reduced demand,” wrote Raj Subramaniam, FedEx Corp. president and chief executive officer.

RELATED: FedEx to close stores, put off hiring as demand slumps

Less than a week ago, he made global headlines by predicting a recession after the company saw a worldwide drop in demand.

“We do know that any setback is a setback for Memphis,” said economist John Gnuschke last week. “We want them to grow and prosper. When they grow and prosper, we grow and prosper.”

Thousands of Mid-South businesses rely on FedEx to ship their goods. In downtown Memphis, Makeda’s Cookies ships dozens of orders a week.

“I’m a little upset and hurt by what’s going on,” said Raven Winton, the operations manager for the company. “I hope they can bounce back. Whatever’s going on. I really want them to bounce back. We love FedEx in the city of Memphis.”

The company has shipped orders as far as Iraq, Winton said. As a Bluff City business owner, she has faith that the company will recover from the financial setbacks.

“My mom always says, when people really want something, they’re not too concerned about the rates,” she said.