FedEx Base Discounts and Earned Discounts – may not be discounts at all

FedEx offers base discount rates that are available for all their service levels. But there may be services shippers use more often such as FedEx 2Day®  in which there may be 0% discount applied. On the other hand, shippers may be getting discounts on other services they never use such as FedEx International Economy®. Here are a few points to remember regarding FedEx Base Discount Rates:

  • Discounts are a percentage off published base rates found in the FedEx Service Guide FedEx Service Guide
  • Base rates are determined by the distance between the origin and destination (also known as “zone”) and the charged weight of the package.
  • These rates do not change with variations in a shipper’s volume.
  • Published rates increase each year. FedEx traditionally announces a general rate increase at the end of each year.

FedEx Earned discounts are based on volume. UPS has a similar program, “Portfolio Tier Incentives.” It is important to ensure all zones are included within your annualized transportation spend. A few points to keep in mind:

  • Earned discounts can be in combination with based discounts with both referring to the annualized transportation charges of your FedEx contract.
  • Earned discounts fluctuate with your shipping volume.
  • Many FedEx agreements have a grace period with a grace discount. Grace periods typically range from 4 to 12 weeks.

Click me for a modal
[gravityform id="1" title="false" description="false"]

Already a client?