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.