FedEx  rate move was announced Thursday as part of its first-quarter earnings report, which showed profit fell 20% from a year earlier and that it was planning additional cost cuts. The company said it expects to generate between $2.2 billion and $2.7 billion in savings this fiscal year from a plan announced last week to park aircraft, suspend Sunday deliveries and close some offices. It also plans to wring an additional $4 billion in annual costs from its operations over the next two years.

The rate increase is higher than in previous years and comes days after the company slashed its profit and sales forecasts. FedEx and rival United Parcel Services Inc. raised shipping rates by an average of 5.9% for 2022—the first time in eight years that either had strayed above 4.9%.

FedEx workers sort through a pile of boxes at the FedEx sort facility at the Oakland International Airport on December 18, 2006, in Oakland, California. 

will levy a general rate increase averaging 6.9% for its Express, Ground, and Home Delivery services starting Jan. 2, 2023, the company announced Thursday. 

The move follows a rocky quarter in which FedEx saw a decline in package volume. 

FedEx’s believes the 2023 increase is appropriate “given the inflationary backdrop” and its pressures on the company’s costs this year, EVP and Chief Customer Officer Brie Carere said in an earnings call Thursday.