Expected 6.9% FedEx Freight rate increase takes effect on January 8, 2027
Key Facts
FedEx Freight expects its average general rate increase for 2027 to be 6.9%, effective January 8, according to FreightWaves. The move comes as the company prepares for a new period as an independent company, after completing its separation from FedEx on June 1, 2026, according to its filing with the U.S. Securities and Exchange Commission. In the period ended September 30, the company repaid $100 million of outstanding debt ahead of maturity, using cash generated by its operations, according to its earnings statement. The results present a mixed picture: growth in revenue and adjusted operating income, offset by a decline in reported operating income and a drop in average daily shipments. The company said its underlying performance was largely in line with expectations.
FedEx Freight revenue totaled about $3.3 billion in the four months ended September 30, up 9.2% year over year, according to the earnings statement. The company attributed the increase mainly to the positive impact of fuel surcharge revenue, higher weight per shipment, an additional operating day and an increase in base revenue per hundredweight. Those factors were partly offset by weaker volumes, the statement said. Average daily shipments fell 1.4% to 88.9 thousand, while daily tonnage was flat at 41.7 thousand tons. That places revenue growth in the context of improved revenue per unit shipped alongside pressure on shipment counts.
Operating income was $383 million, down 6.1% year over year, while adjusted operating income reached $510 million, up 16.4%, according to the company’s disclosure. Adjusted operating margin increased 90 basis points to 15.5% over the same period. The adjusted metrics show improvement from a year earlier while reported operating income declined; the company provided both figures in its earnings statement. Chief Financial Officer Marshall Witt said, "Underlying performance was largely in line with our expectations, while our initiatives are strengthening the foundation for better growth and profitability." The company said its updated guidance for the transition period reflects favorable fuel factors and slightly higher volume assumptions.
FedEx Freight said broader freight conditions showed signs of improvement and that trends in volumes and base yield continued to stabilize, according to its quarterly report. At the same time, it expected continued weakness in the industrial economy to weigh on demand for less-than-truckload services through the rest of 2026. In after-hours trading on Thursday, October 29, the company’s shares, FDXF, rose 3%, according to FreightWaves. The stock closed at $126.04 on October 30, according to EL7 data. The market move followed the earnings and outlook announcement, while the period’s data reflect a divergence between revenue growth and declining daily shipments.
For the three months ended December 31, 2026, the company expects revenue of between $2.30 billion and $2.37 billion, compared with revenue of $2.07 billion in the corresponding period of 2025. It also expects adjusted operating income of between $185 million and $205 million, versus $162 million a year earlier, according to the earnings statement. The outlook is based on the transition period ending in December, following the four months in which the company recorded revenue of $3.3 billion. On returning capital to shareholders, the company said it still aims to announce its 2027 dividend and share repurchase plan, subject to board approval. The board has not yet approved the plan, according to the disclosure.