Shipping items through Fed Ex is about to get more expensive.
The company announced plans on Monday to raise shipping rates by an average of 4.9% starting Jan. 7. The reason? Rising fuel costs.
During its quarterly earnings in August, FedEx said that its fuel costs were 40% higher than they were last year, adding more than $200 million in extra expenses. Labor costs also rose during the past year by 11%, CNN reports.
That said, FedEx has managed to recover some of those increased fuel costs from a fuel surcharge levied on some of its customers.
FedEx isn’t the only shipper that is likely raising rates next year. The U.S. Postal Service has proposed raising prices for its Priority Mail service an average of 5.9%, slightly more than FedEx’s price hike. That rate increase is still awaiting government approval, but if it happens it would also go into effect in January. UPS has not yet announced plans for an increase in 2019.
In early 2018, FedEx raised its rates 4.9%.