The annual rate adjustment season is upon us. FedEx announced its plans for a 5.9% average general rate increase (GRI), effective January 12, 2026. Shortly after, UPS followed suit, announcing a similar average 5.9% rate increase.
This UPS rate increase will raise the cost across all UPS services—including Ground and Air—and applies to both U.S. Domestic and International packages.
So, what are the reasons for and ramifications of such an increase on your shipping expenses? Here’s what you need to know about UPS rate increases.
What Is the UPS GRI?
The General Rate Increase (GRI) is a mechanism employed by leading shipping carriers like UPS and FedEx to update their pricing schedules. It's presented as a necessary step to stay aligned with inflation, counter rising operational costs, invest in new technologies, enhance services, and perform fleet maintenance. However, it's essential to remember that this financial buffer primarily benefits the carriers themselves, not their customers.
VIEW OUR COMPREHENSIVE GUIDE TO THE 2026 UPS & FEDEX GENERAL RATE INCREASE
When Is the UPS GRI Effective Date?
UPS has announced that its 5.9% General Rate Increase will take effect on December 22, 2025. This applies to Daily Rates and Small Business Rates across UPS Ground, Air, and International services.
Several value-added services and surcharges, such as address corrections and delivery confirmation, will also see increases. Even non-shipping costs are rising, such as the weekly printer-rental fee, which is increasing from $3.00 to $9.99.
Because the update comes immediately after the holiday season, many businesses may feel the impact during an already demanding shipping period.
How Does this Compare to Previous UPS Rate Increases?
While this year's 5.9% rate hike is similar to previous year's, it's still well above historical pre-pandemic norms of 3% to 4%. The rate increase this time around reflects ongoing inflationary pressures and higher operating costs in the logistics industry, which have contributed to a consistent trend of elevated rate hikes. Additionally, this increase continues the trend of applying higher adjustments to certain surcharges, which may have a more significant impact on shippers with certain package characteristics.
Other Charges to Consider
The GRI average only paints a partial picture when it comes to understanding and controlling your total shipping expenses. Beneath that 5.9% rate hike are various additional line-item costs that might cause the cost of shipping to unexpectedly balloon. Specifically, businesses must account for the following factors:
Surcharges – These are separate fees that carriers impose on top of standard rates, such as charges for oversized parcels, additional handling, delivery area surcharges—all with an additional fuel surcharge assessed on the total. Often unseen but impactful, these surcharges can quickly inflate your final shipping rates by more than 30%.
Mid-Year Increases – A recent trend among the carriers is making small incremental changes throughout the year, updating their Service Guides and pricing changes quietly through the year. Penalty Fee increases, new Payment Processing Fees, and updated rounding rules on package dimensions have enabled the carriers to soften the blow of the true “GRI” while they increase margins across their customer base.
How Does the GRI Impact Businesses?
Understanding the ripple effects of the GRI on your business is crucial for proactive planning. Here's a quick rundown of how the UPS rate increase can affect various aspects of your operations:
Margins squeeze – A GRI can quickly erode your profit margins, especially if you're operating on thin margins to begin with. When shipping costs rise, you must either absorb them or pass them on to the customer, both of which can affect profitability.
Budget revisions – You may need to re-evaluate and adjust your annual or quarterly budgets to account for increased shipping costs.
Supply chain delays – Increased costs might make businesses reconsider their supply chain logistics, potentially leading to delays as new, cost-effective strategies are devised.
Cash flow – An increase in regular operating expenses like shipping can put a strain on your cash flow, requiring more vigilant financial oversight.
Erosion of competitive edge – If competitors find more effective ways to mitigate the effects of the GRI, they could gain a pricing advantage over you in the market.
In addition to understanding these rate hikes, learning about and implementing logistics analytics in your supply chain can help to curb effects of rising shipping costs.
Control and Reduce Your Shipping Costs with Lojistic
Brace yourselves—2026 UPS rate hikes are nearly here. Are you fully prepared?
How Lojistic Can Help
Impact Analysis: Our in-depth Impact Analysis can provide businesses a clear picture of how these upcoming rate changes will influence their operations over the next year, and offer strategies to offset these imminent hikes. Knowledge empowers decision-making!
Unified Shipping History: Our free platform enables companies to effortlessly view their consolidated shipping history across various carriers and methods, delivering crucial data for making more informed choices.
Free Invoice Audit: A Lojistic account automatically scans for billing discrepancies, allowing businesses to claim refunds and cut down on avoidable costs.
Change Impact Assessment: Companies can leverage our "Compare Mode" to evaluate the financial impact of adjustments, such as rate increases, on their overall shipping expenditures, then easily implement necessary operational changes and measure the outcome.
In a climate of seemingly ever-increasing shipping costs, savvy businesses need to deploy every tool available to maintain control over their costs. Our platform offers instant analytics and cost-saving automation designed to help you take charge of your shipping costs. Consider it your centralized home for full visibility and command of your shipping spend.
Understanding the implications of these rate hikes is crucial for businesses, and we encourage you to explore our FedEx Rate Increase article as well. Understanding both FedEx and UPS rate adjustments will empower you to make informed decisions to optimize your shipping strategies and manage costs effectively.
VIEW OUR COMPREHENSIVE GUIDE TO THE 2026 UPS & FEDEX GENERAL RATE INCREASE
Frequently Asked Questions
UPS 2 Day shipping rates vary based on package weight, zone, dimensions, and surcharges. With the 2026 UPS rate increase, many 2-day shipments now cost more due to higher base rates and adjustments to accessorial fees. Lojistic’s tools let you compare real carrier contracts, analyze rate changes, and understand how the new pricing affects your 2-day shipments.
UPS shipping costs are calculated using a combination of billed weight, dimensional weight, distance (zone), service level, and surcharges. The 2026 UPS rate increase introduced updated base rates and surcharge adjustments, making manual calculations even harder. Lojistic helps shippers calculate UPS costs accurately by modeling shipments with current rate tables, contract terms, and surcharge impacts.
UPS shipping costs depend on your package size, weight, service level, and destination, along with fuel and accessorial fees. Because of the 2026 UPS rate increase, many shippers are seeing higher small-parcel costs across service types. Lojistic helps businesses benchmark real UPS market costs and understand how the annual rate increase affects their total shipping spend.
Author
Christine Basile
Christine Basile
Director, Rate Services
Christine Basile brings over two decades of hands-on experience in shipping and supply chain operations, with a career spanning 3PL, shipper, and carrier-aligned organizations. She has held strategic leadership roles at Apple, Kenco Group, AutoZone, and RR Donnelley, where she negotiated and managed contracts totaling over $1.3 billion in annual shipping spend.
Her background in building scalable shipping strategies, leading RFPs, and implementing enterprise-wide cost control initiatives makes her a trusted advisor to shippers of all sizes navigating an increasingly complex logistics environment.
As Director of Rate Services at Lojistic, Christine applies her deep expertise to help clients reduce costs, streamline operations, and optimize performance across their shipping networks.