Page last updated at 17:07 GMT, Thursday, 17 September 2009 18:07 UK

FedEx lifts rates as profits fall

Fedex worker in New York

The delivery company FedEx has said it plans to increase its prices next year after reporting falling profits.

Its net profit for the three months to the end of August was $181m (£110m), which was down 53% from the same period last year.

The company said that the slow economy was hurting its sales. It is to raise express shipping rates 5.9% in January.

It said falling fuel prices had reduced its profitability because its fuel surcharges lag behind the price of oil.

'Consistent with others'

There was support for the price rises from analysts.

"This is consistent with what others are doing," said Helane Becker from Jesup & Lamont Securities.

"Lufthansa announced a 25% rate increase in August. AirFrance-KLM announced 20% rate increases."

The big delivery companies FedEx and United Parcel Service are seen as indicators of the state of the health of the US economy.

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