UPS and FedEx First Quarter 2021 Price increases and peak surcharges
Updated: Mar 26, 2021
UPS and FedEx continue to apply new peak season surcharges in response to what they call ongoing capacity issues. It has now been a full year since each of the carriers suspended Service Guarantees and there still has been no word (1 Quarter of the year in) if those will be reinstated. This article will shine a light on recently announced increases from both of the carriers.
Domestically, FedEx continues to penalize shippers for large packages and charging moree for you're a high volume e-commerce shipper (that ships more than30,000 package per week). Moving Larger packages involves more time and labor and takes up premium space on the trucks and planes. On the other hand, while larger volume shippers can typically expect larger discounts from the carriers, FedEx has now been adding surcharges to these less profitable segments of its client base.
UPS domestic shipments have a similar story to FedEx. There are two primary differences: 1) SurePost requires a minimum number of packages before fees are assessed, and 2) it’s a smaller fee. The weekly threshold for UPS is 25,000 packages vs. 30,000 for FedEx.
It wasn’t all that long ago we were used to one annual rate increase, known as the General Rate Increase (GRI), but over the past few years, we’ve seen multiple mid-year increases, as well as the introduction of completely new accessorials.
Take a look at the amount of increases and rate changes implemented by UPS in just one calendar year, it's astonishing!
The graphic above displays all the UPS changes in roughly, just one calendar year: https://www.ups.com/us/en/shipping/rates-update.page
We're not picking on UPS, as both FedEx and UPS have the tendency to follow in each others foot steps with increases (just that they display it on their website like this).
It is more important than ever to understand how all these intra-year changes are affecting your shipping costs. Complex pricing and rules make it difficult to determine how these and other carrier changes impact your organization, but understanding these changes is more important than ever.
How are you preparing and protecting your organization?
Having a partner to help you navigate the stress and confusion of carrier contracts and the multiple price increases is an asset, now more than ever!
If you need help with questions or need an expert eye to help you dig into your pricing or contracts to help you find ways to avoid fees, decrease your spend and make sure you're getting everything you should from the carrier, we can help!
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