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Fuel costs push FedEx to raise prices

FedEx is announcing a rate increase for overnight shipping which will be in effect at the start of 2006. Rates for the overnight service will increase by 3.5 percent. The higher rates comes from a rate-chart increase of 5.5 percent coupled with a cut of 2 percent in their airline fuel surcharge. The net increase for customers is the largest since 2001.

FedEx is only one of a number of companies making changes to deal with the increased fuel prices in the wake of higher price-per-barrel prices of oil as well as decreased refining capacity in the wake of the hurricanes which recently struck the Gulf coast of the United States, where a good portion of U.S. refining capabilities lie and which was temporarily put out of action thanks to back-to-back storms Katrina and Rita.

Airlines have been particularly hard hit, as recent price-per-barrel of oil reached $59 and beyond when just a year ago at the same time the price per a barrel of oil was $13. The higer fuel prices have been a major factor for companies like Northwest Airlines and Delta Airlines in deciding to declare bankruptcy recently.