DHL Express plans to raise rates for shipments for U.S. customers by an average of 5.9% starting Jan. 1, effectively matching a FedEx Corp. price increase for next year in an action that will raise costs for parcel shippers.
“You have general inflation, we’ve got to cover for that,” as well as added infrastructure, such as planes, trucks and facilities, said Mike Parra, chief executive for the Americas for the unit of Deutsche Post AG.
The increase announced Friday will apply to U.S. account holders shipping to or from the 220 countries and territories DHL Express serves, a spokesperson said. The company, which operates mostly international delivery services in the U.S. with limited domestic operations, increased rates by an average of 4.9% for 2021, and by 5.9% on average for 2020.
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FedEx last month said it would raise its prices across its services next year by an average of 5.9%, the first time in eight years that the carrier or rival United Parcel Service Inc. went beyond a 4.9% annual increase. UPS hasn’t announced its plans for rates in 2022.
DHL Express said last month it would invest $360 million in upgrading and adding facilities in the Americas and bolstering its freighter fleet to handle surging e-commerce volumes in its network.
Cathy Roberson, head of research and consulting firm Logistics Trends & Insights LLC, said she expects the rising parcel costs to trigger changes in how businesses, particularly those shipping to consumers, manage their logistics.
“Retailers may need to rethink the whole ‘free shipping’ offering that they provide to their customers,” she said. “It’s going to end up having to be trickled down to the customer, because the shippers—such as retailers, manufacturers, wholesalers and so on—they can’t keep absorbing higher costs. They’ve got to pass them on in some form or another.”
Write to Lydia O’Neal at [email protected]
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Source:" WSJ "