This article brought to you with: Finale Inventory.

See how Finale Inventory helps you improve and scale your operations with their all-in-one, multi-channel inventory management solution.

UPS and FedEx Increased Their Rates

Image via Flickr JeepersMedia

It’s typical for shipping rates to increase every year to accommodate employees’ annual salary increases and new technology upgrades. At the end of 2016, however, UPS, FedEx, and the United States Postal Service (USPS) increased their rates higher than what’s normally expected. It’s important to understand shipping rates when choosing a delivery service provider because each company provides different rates and surcharges based on package size, weight, route length, and more factors. There’s no one-size-fits-all solution. Check out the new rates for 2017 and learn why the large increases happened.

What Are the Shipping Rates for UPS in 2017?

UPS increased its rates by an average of 4.9 percent over the rates for 2016. The new 2017 rates went into effect on December 26, 2016. This happened across all of the company’s services, including ground, air, and freight. Additionally, UPS added a new handling charge that it intends to assess for packages that exceed 48 inches on the long side. This is a change from the additional charge for packages exceeding 60 inches in 2016. UPS also added several other surcharges to its shipping fees and rates. 

What Are the Shipping Rates for FedEx in 2017?

FedEx also increased its shipping rates for 2017, but they didn’t go into effect until a week after UPS’s new rates began. FedEx’s rate increases happened on January 2, 2017 and went up by an average of 4.4 percent across all of its services. Additionally, FedEx increased its residential surcharge by 5.1 percent.

What Are the Shipping Rates for USPS in 2017?

The USPS didn’t raise its rates as much as UPS or FedEx, but the company still levied above average rate increases. They ranged from 2.7 percent to 4.9 percent across the company’s various services. The average rate increase was 3.9 percent. The USPS doesn’t impose any surcharges, but that doesn’t mean that this shipping provider’s rates are always lowest.

Why Did Rates Increase More Than Normal?

E-commerce is growing rapidly, and consumers are demanding faster and faster delivery services. These are two of the biggest reasons for the shipping rate increases in 2017. Fast fulfilment costs more money, and it’s challenging for retailers and shippers to manage. Shipping rates also change based on fuel costs, service levels, delivery zones, and several other factors. Shipping rates will continue to rise overall, but as shippers develop methods for accommodating faster delivery services, the rates shouldn’t rise as drastically as they did from 2016 to 2017.

When shipping rates go up, it’s time for your company to reevaluate your shipping service provider. It may be more advantageous to switch to a new shipping provider to ensure that you keep your shipping costs to a minimum. New shipping rates can also help facilitate carrier negotiations, faster delivery timeframes, and new packaging sizes. Make sure that your company analyzes how the 2017 shipping rate increases affect your company and then make the appropriate changes.

Global Procurement & Supply Chain Professionals Read This…

Free Case Study When You Subscribe

…Carefully curated procurement & supply chain issues that make you look smart, sent to your inbox every week.

PLUS: Get the FREE Procurement Case Study when you subscribe: “How McDonald’s Overcame Global Supply Chain Obstacles”

Procurement Bulletin eNL Subs Email Only Step 1

Similar Posts