FedEx plans to raise rates across its delivery operations next year in the wake of a disappointing fiscal quarter and a “difficult operating environment.”
The parcel delivery giant announced the increases Thursday as part of its fiscal first quarter financial report. Officials said that rates for FedEx Express, FedEx Ground and FedEx Home Delivery would increase by an average of 6.9%, while its FedEx Freight service would increase rates at an average of between 6.9% and 7.9%, depending on the customer’s transportation rate scale.
The increases are scheduled to take effect Jan. 2.
FedEx posted $23.2 billion in revenue for the quarter and profit of $875 million. The company’s profit was down from more than $1.1 billion in same quarter last year.
FedEx officials had previously warned that it would miss Wall Street forecasts for the quarter, and that it would suspend new hiring and close stores and corporate locations due to a decline in volume worldwide and “significantly” worsening macroeconomic trends later in the period.
“I am confident the cost actions we’re implementing with urgency will enhance efficiency and drive improved profitability in support of our long-term financial targets,” Michael Lenz, FedEx’s executive vice president and chief financial officer, said in the earnings announcement.