FedEx will increase shipping rates 5.9% next year to offset falling profits. The BBC reports:
Its net profit for the three months to the end of August was $181m, which was down 53% from the same period last year.
The company said that the slow economy was hurting its sales. It is to raise express shipping rates 5.9% in January. It said falling fuel prices had reduced its profitability because its fuel surcharges lag behind the price of oil.
Next year’s rate increases will fall “slightly below an average 6.9% increase that it put in place to start 2009. In both cases, FedEx noted that lower fuel surcharges likely would offset about 2% of the rate increases,” according to the Wall Street Journal.
FedEx also noted a 4% decrease in overseas priorities deliveries, “the smallest slide in four quarters, reflect(ing) returning global demand,” says Bloomberg. “Analysts consider FedEx to be an economic bellwether because it moves goods ranging from mortgage documents to auto parts to clothing.”
