FedEx will hike rates in January

FedEx will hike rates in January FedEx Corp. said it will increase shipping rates by an average of 6.9 percent for U.S. and U.S. export services, effective Jan. 5.
   The company said the rate increase would be partially offset by adjusting the fuel price at which the fuel surcharge begins, reducing the fuel surcharge by two percentage points.
   Additional changes will be made to other FedEx Express surcharges, details of which can be found at www.fedex.com/us/2009rates. It said FedEx Ground's rate and surcharge increases for 2009 will be announced later this year.
   The company made the rate hike announcement as it announced results for the first quarter of its fiscal year. FedEx reported net profit of $384 million in its first quarter ending Aug. 31, down 22 percent from the $494 million made in the same 2008 period.
   Revenue for the quarter was $9.97 billion, up 8 percent from $9.2 billion in the same 2007 period.
   “Global economic conditions are challenging, but FedEx is taking strong, proactive actions to manage through this difficult cycle,” said Frederick W. Smith, FedEx chairman, president and chief executive officer.
   The company said total combined average daily package volume in the FedEx Express and FedEx Ground segments grew 1 percent for the quarter, but that growth in ground, FedEx SmartPost and international domestic express shipments was substantially offset by a continued decline in U.S. domestic express shipments.
   “Strong cost management actions were more than offset by global economic weakness, higher fuel prices and the related negative effects of higher fuel surcharges,” the company said. “While fuel prices decreased from historic highs late in the quarter, the average price of jet fuel was up 77 percent year over year.”
   Looking forward, the company said in the second quarter it expects earnings of $1.40 to $1.60 per diluted share compared to $1.54 a year ago.