UPDATE: Use this link if you're looking for 2022 rate increase information.
This week, UPS announced their 2021 rate increase, which will be made effective in January of 2021.
This announcement comes almost two months after FedEx announced its 2021 rate increase. See the details of FedEx’s rate increase here.
Both carriers continue to increase rates and roll out new surcharges/fees despite posting record earnings over the past several months.
Additionally, neither of the “big two” carriers have reinstated a shipper’s ability to file for late shipments. And as of today, there is no set timeframe for when their service guarantees will be reinstated. What gives?!?
So how will UPS’s 2021 rate increase impact your business? Well, it’s no surprise that UPS mirrored FedEx’s price increase in the following areas:
4.9% average increase for Ground, Air and International
Minimum charge for a zone 2, 1lb ground package is increasing from $8.23 to $8.76 (increase of 6.05%)
Additional Handling charge will be applied to any package with a combined length plus girth that exceeds 105 inches
Over Maximum (known as “Unauthorized” with FedEx) is increasing from $875 to $920
Across-the-board surcharge increases
What is a surprise, however, is that UPS will be changing how they apply their Additional Handling and Large Package Surcharges:
Effective April 11, 2021, Additional Handling and Large Package Surcharges for non-hundredweight service packages will differ by zone
Effective July 11, 2021, Additional Handling and Large Package Surcharges for hundredweight service packages will differ by zone
Essentially each of UPS’s most common surcharges will see increases, which means your net effective increase could be much higher than 4.9%.
So, should you allow UPS to increase your rates without any recourse?
Your free Lojistic account takes less than a minute to create, and provides the information necessary to measure the impact of UPS’s upcoming price increase so you can decide whether it’s best to push back or concede. If you already have a Lojistic account, log in now.
And if you need support in determining how this increase will impact your business in 2021, we’re here to help.
P.S. Be on the lookout for our annual “General Price Increase History” whitepaper, which will be released in the coming weeks.
Author
Rich Harkey
Rich Harkey
Senior Strategy Manager
Rich Harkey is a results-driven professional with extensive experience in the logistics and supply chain industry.
As the Senior Strategy Manager at Lojistic, Rich leverages over three decades of expertise to help businesses improve their shipping strategies and reduce costs. With a deep understanding of the requirements of shippers and the operational intricacies of carriers, he excels in everything from optimizing business rules and managing carrier invoices to negotiating carrier contracts.
Rich's comprehensive knowledge of the logistics industry, combined with his strategic insights and passion for data analysis, has enabled thousands of companies to gain visibility into their shipping expenses, driving impactful results.