FedEx Corp. announced late Thursday a 6.9% general rate increase for 2023.
According to the company, increases there will range between 6.9% and 7.9%, depending on each transportation rate scale.
The increase is beyond the 4.9% to 5.9% FedEx regular annual increase. Analysts were expecting a 6% or more increase for 2023 to offset the impact of cost inflation.
This is the largest year-over-year increase in the carrier’s history. The increase will apply to all FedEx services except for FedEx Freight.
FedEx said it plans to save between $2.2 billion and $2.7 billion during the current 2023 fiscal year through cost reductions.
Reducing FedEx Express flights and the company’s aircraft fleet stand out among reductions. Those moves will save between $1.5 billion and $1.7 billion, the company said.
In addition, FedEx plans to cut $4 billion of costs by fiscal 2025, which starts June 1, 2024. The company said it will stick with its plan, announced in late June.
Last week, FedEx CEO Raj Subramaniam said a recession is likely next for the global economy as consumers across the world battle surging inflation.
FedEx fell 3.2% in the premarket after the news broke.