U.S. shipping giant FedEx is echoing a sentiment from other large companies as persistent inflation, and Fed policy rate hikes signal the possibility of an impending recession.
Companies like FedEx are preparing for a slowdown in consumer discretionary spending, which means there could be a slowdown in package deliveries.
FedEx is announcing that it will raise rates to cover losses.
The company says customers should expect higher rates on its Ground and Express services starting in 2023.
Customers should expect to see an average rate hike of about 6.9% or more for services.
The company will also impose a shipping rate hike on its Freight service as well which could have a direct impact on the cost and availability of consumer goods.
Freight rates will rise on average by about 6.9% as well.
The company warned in recent forecasts that it expects demand for package deliveries to slow down around the holiday shopping season, and it is preparing for around $500 million in profit losses.