On October 28, 2021, UPS announced price increases that will go into effect on December 26, 2021.
UPS U.S Domestic Express, Ground, and Import and Export rates are expected to increase an average of 5.9% for package services. The 5.9% average increase is a jump from the average increase of 4.9% over each of the last eight years.
An increase to the UPS fuel surcharge was also announced. This is a blow to shippers already experiencing fuel surcharge increases over the last year. The average ground fuel surcharge is up 4.5% from July 2020 to September 2021, as you can see in Chart 1 below:
Notable Changes Taking Effect on January 3, 2022
UPS will continue the trend they started in 2020 of determining Additional Handling and Large Package surcharges by Zone, which FedEx has recently announced they will do in 2022. Rates for some zones will increase as much as 38%.
How Does This Affect My Company?
The 5.9% average increase only applies to the transportation portion of the shipment cost, so some shippers may experience a larger increase. Other charges, including certain accessorial charges and fuel charges, are set to increase even more than 5.9%. As you can see in Table 1, many surcharges will increase beyond 5.9%, with some as high as 38.1%.
The Latest UPS Rate Charts
Table 1. Increases to some of the most common surcharges from 2021 to 2022.
Many of the package minimum rates will increase in late December as you can see in Table 2 below. The ground minimum is set to increase 6.85%, which could strongly impact your shipping costs if a large percentage of your shipments are at the minimum charge.
Table 2. Increases to minimum package rates from 2021 to 2022.
Interpreting UPS Rate Charts and Price Increases
A good starting point to understanding the rate increase is to talk to a technology-driven company that can estimate the actual increase to your business using an impact analysis. An impact analysis takes your actual shipments and calculates the projected cost using the rate increases. They can also give you access to your shipping data in a much more informative and robust way than the carriers, which will allow you to identify the areas of greatest impact.
What Can I Do About It?
You should consider working with a provider that can help you negotiate a new carrier pricing agreement to mitigate the rate increase, especially if it’s been a while since your last negotiation.
Another way to reduce your shipping costs is to closely monitor your spending in real time. Work with a provider that can take your weekly shipping data and distill it into meaningful information in the form of a shipping analytics dashboard. You can monitor avoidable charges and make simple changes that will save your company money.
The rate charges are coming quickly. If you ship with UPS or FedEx then now is a great time to talk to an expert to help you understand and mitigate the rate increases for your business. Contact us today or call us at 800-675-6598.
