LAFAYETTE, Louisiana (KPEL News) - It's going to get more expensive to ship things in 2023.

FedEx ground and express shipping rates are going up this year as the company attempts to recover from shortfalls and major budget cuts. The company announced the hike in September after stating it would have to cut its budget by about $500 million.

Price increases will average about 6.9 percent and up to 7.9 percent for freight. Customers will also see about an 8 percent increase in the late payment fee for U.S. FedEx Express and FedEx ground.

The increase will affect individuals and businesses alike.

Similar rate hikes were seen in 2022.

Along with those rate hikes, you'll see a surcharge if you ship to certain zip codes that FedEx has designated as "U.S. Contiguous Remote." For example, sending a package to parts of St. Martin, St. Mary, Jefferson Davis, Iberia, and Evangeline Parishes will cost an extra $13.25, starting January 30.

You can read more about the FedEx rate hikes here.

FedEx To Raise Shipping Rates In 2022
Mario Tama, Getty Images

It's not just FedEx, though. UPS is also raising rates, though the two companies are going about it differently.

The shipping consultancy predicts there will be virtually no difference in 2023 rates between FedEx and UPS. Though the rates will differ depending on specific products, the all-in result is there will be virtually no discrepancy between the carriers, the report noted. Both have announced record 6.9% general rate increases (GRIs) for 2023. However, virtually all parcel traffic moves under contract.

TransImpact said UPS rates for three-day deliveries will be about 15% below those of FedEx and UPS will also underprice on second-day morning service in the U.S. and on most international routes. However, FedEx will underprice UPS on the carriers’ slowest and least expensive ground services, TransImpact said. UPS’ SurePost service is managed in conjunction with the U.S. Postal Service, which delivers UPS’ parcels. The report said there will not be much total difference in the delivery charge increase of two carriers in 2023 but there will be some variance depending on the specific surcharges, the report noted.

Economic problems - including inflation and supply chain issues - have caused problems for companies and consumers alike. Worker shortages across several sectors have also had a financial impact.

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