The FedEx Rate Increase You Weren’t Expecting

by | Oct 26, 2020

3 min read


Every fall, shippers watch for the carriers’ General Rate Increase (GRI). But this year FedEx announced something new along with their 2021 rate increase: a late payment fee.

Starting in January 2021, FedEx will charge a 6% late fee to U.S. FedEx Express and FedEx Ground customers who don’t pay their invoices on time. Whatever payment terms you have with FedEx, you can expect to pay more if you don’t pay by the due date.

Though UPS has had a late fee in place for many years, this is new for FedEx. Some shippers have become comfortable with not paying FedEx invoices on time because there wasn’t a financial penalty. But 6% is going to bust your shipping budget pretty quickly if you pay your invoices late next year.


How to avoid the FedEx late payment penalty

Certainly, the easiest way to avoid this 6% fee is to pay your invoices on time. For a variety of reasons, this might be a challenge for some shippers.

If paying on time is an issue for your company, you can take a few different approaches:

  • Negotiate a longer payment window.
    Like so many other aspects of your carrier contract, FedEx payment terms are negotiable. Talk to your carrier rep about extending your payment terms to 30 or even 45 days if that would help your business. Longer payment terms also give you a better chance to confirm that your charges are correct so you don’t overpay.A recent survey we did shocked us: 56% of respondents hadn’t negotiated their carrier contract this year. Negotiating the terms of your contract is a crucial part of your shipping operations — don’t let opportunities to save slide by.


  • Let someone else handle invoice payment.
    Let’s face it: Sometimes due dates get overlooked. You don’t want to pay extra for a simple mistake. And if you’re missing payment deadlines, you might also be missing refunds you’re owed. Many shippers don’t know that once you pay a shipping invoice, you lose your chance to get a refund for any incorrect charges — and you overpay. 

    If your issue is being overwhelmed by the number or detail of your invoices, look into a bill payment service that ensures you don’t pay too late (incurring a fee) or too early (missing your chance for refunds). Look for a service that consolidates your shipping invoices in one spot — especially beneficial when you use multiple carriers — and creates an audit trail for your peace of mind.


Understand what’s changing in the shipping industry in 2021

A lot of shippers are so overwhelmed by trying to stay ahead of all the headaches that shipping in 2020 has caused that they haven’t taken the time to really dig into the 2021 GRI to see how it will affect their business, including this new FedEx late payment fee. 

It’s imperative that you get familiar with all the changes your carrier is making next year so you can prepare properly. Our experts have put together a guide to help by letting you in on the three mistakes you don’t want to make with the 2021 GRI. Grab your copy so you can make a solid plan — and a solid budget — for the year to come.

Topics: FedEx, General Rate Increase