FedEx raises rates, celebrates strong first quarter

The integrator will implement a rate increase of 4.9% on Jan. 5.    FedEx will increase shipping rates by an average of 4.9 percent on Jan. 5 in addition to imposing the previously announced switch from chargeable weight to dimensional weight calculations for all FedEx Ground cargo.
   The 4.9-percent rate change will apply to FedEx Express domestic, export and import services, as well as FedEx Ground and FedEx Home Delivery.
   FedEx officials announced the weight change in May; UPS changed its policy for weight calculation to mirror the FedEx approach in June.
   FedEx announced Wednesday it saw a 6-percent, year-over-year, rise in revenue during the first quarter of fiscal 2015, finishing the period at $11.7 billion, as operating income finished up 24 percent to $987 million. Net income stood at $606 million, a 24-percent rise.
   The integrator also announced that its capital-spending forecast of $4.2 billion remains unchanged.
   “FedEx Corp. is off to an outstanding start in fiscal 2015, thanks to very strong performance at FedEx Ground, solid volume and revenue increases at FedEx Freight and healthy growth in U.S. domestic volume at FedEx Express,” the company’s chairman, president and chief executive officer, Frederick W. Smith, said in a statement.  “More customers are relying on FedEx because they appreciate the competitive advantages provided by our broad portfolio of solutions.”
   FedEx Express saw a 4-percent bump in revenue during the quarter. Officials said there was somewhat lower freight revenue, but this was offset by volume increases in international export and domestic package shipments; domestic package shipments rose by 5 percent.
   FedEx Ground experienced an 8-percent rise in revenue thanks to 6-percent volume growth due to e-commerce sales. Revenue-per-package grew by 3 percent.
   FedEx Freight had the largest revenue increase at 13 percent, as operating income shot up 70 percent to $168 million. The company said LTL shipments increased by 11 percent.  
   “All three of our transportation segments drove higher revenues and improved profitability, year-over-year,” Alan B. Graf, Jr., the company’s executive vice president and chief financial officer, stated. “Our profit-improvement programs are progressing as planned, and we continue to expect strong earnings growth this year.”