Shipping rates are going up faster than they have in nearly a decade, increasing pressure on merchants to raise prices or find other ways to offset higher costs.
FedEx Corp. on Monday said shipping rates would go up an average of 5.9% next year across most of its services, the first time in eight years that it or rival United Parcel Service Inc. has strayed above annual increases of 4.9%.
UPS is expected to release its rate increase for 2022 in the coming weeks. The two carriers have moved in lockstep with their annual price increases since at least 2010, according to Transportation Insight LLC, a supply-chain management and logistics firm.
The move away from a 4.9% annual increase shows how the pricing power has shifted to carriers like FedEx, UPS, and the U.S. Postal Service, which have seen demand for their shipping capacity and home delivery soar during the pandemic. The higher-than-normal rate hike also is a sign of inflation reverberating across the global supply chain.