UPS and FedEx Announce 5.9% General Rate Increase for 2022 Author: Nathan Wheadon
December 22, 2021

Both UPS and FedEx are raising their rates by 5.9% for 2022. The general price increase (GPI) aka “General Rate Increase” or “GRI” is an annual carrier “tradition,” so it should come as a surprise to absolutely no one that shippers will once again be forced to adjust to even higher shipping costs. If you’re a UPS or FedEx customer, the only constant is change - in the form of paying more. 

Are you looking for the 2022 Annual General Price Increase Report? Click here or on the image below to view/download. 

2022 GPI

What is a bit of an eyebrow raiser is the 5.9% mark. This is a full percentage point higher than the GPI of the previous four years. Between 2018 - 2021, UPS and FedEx were consistent with a 4.9% increase. So to see that figure go even higher is a deviation from the recent “norm.” 

Here’s What You Can Get From This Blog:

When Does the 2022 GPI Go Into Effect? 

The 2022 General Price Increase (GPI) is 5.9% for both UPS and FedEx and applies only to the weight/zone rates for their Air, Ground and International services. Keep in mind, this is just an average. The GPI will be made effective December 26, 2021 for UPS and January 3, 2022 for FedEx.

UPS and FedEx copy each other on just about everything so why the difference in effective dates? Is this strategic and deliberate like most other moves made by the carriers? Perhaps UPS implements their GPI right after Christmas to capitalize on seasonal returns and post-Christmas sales. After all, the higher shipping volumes continue for weeks after December 25. Why not charge more for an extra week during peak season if you’re UPS!

2021 Was A Good Year for the Carriers. Not So Much For Shippers.  

The GPI comes after yet another year full of so many blows to businesses who rely on UPS & FedEx. In 2021, both carriers consistently posted record profits and rolled out several mid-year surcharges while limiting a shipper’s ability to file for late shipments

We’ve also heard many stories of bewildering customer interactions, some from companies who have been long-time loyal customers of UPS and FedEx. When it’s a “Carrier’s Market,” the customer often pays the price both monetarily and in the way they’re treated by their carrier.  In one particularly egregious situation, a shipper with good payment history was forced to agree to automatic debits as their only invoice payment method. 

Will My Shipping Rates Increase By More Than 5.9%? 

Yes. While UPS and FedEx advertise the GPI at 5.9%, that figure is just an average. It does not account for surcharge increases, weight & zone specific rules, and other fees that impact what it actually costs to ship a package. Your actual increase will vary depending on your weight/zone characteristics and service levels used. That means you’ll most likely end up paying much more than the advertised 5.9%.

2022-GPI_Graphics-Blog-01

Our analysis and data modeling reveals UPS shippers should plan for a 10%+ increase, while FedEx shippers should prepare to pay 12%+. If you want to get a better understanding of how the new, costlier rates will impact your business, create a Lojistic account. It’s free and will give you a clear picture of your shipping characteristics, along with a path to control and reduce your shipping costs.

Where Can I Find the 2022 GPI Details? 

2022-GPI-Blog-01

View or download the 2022 UPS/FedEx General Price Increase Report here. We break down all of the details of this year’s GPI and give historical context from a decade’s worth of carrier price increases. 

In fact, since 2012 Ground shipping rates have increased 74.9% and air shipping rates have increased 75%! 

Here are some of the key takeaways from the 2022 GPI:

  • As we’ve seen over the last few years, both carriers continue to focus on margin improvements, especially on the short-zone, lighter weight packages. This is evident in the 6.8% increase for Zone 2, 1 lb. Ground shipments (increasing to $9.36 from $8.76).
  • Nearly all surcharges are increasing by more than 7%, and many are increasing by double digits.
  • FedEx has followed UPS and is moving to zone-based Additional Handling and Oversize surcharges. 
  • UPS, once again, is revising the zip code ranges for which they assess their Delivery Area Surcharge and Extended Delivery Area Surcharges. Additionally, effective January 9, 2022 UPS will begin assessing a $12.00 Remote Area Surcharge for deliveries to certain ZIP Codes in the 48 contiguous states, as well as UPS On-Call Pickup requests in those ZIP Codes. 
  • Both carriers continue to penalize shippers who ship large packages. The Unauthorized (FedEx) and Over Maximum (UPS) fees will increase 11.4% (increasing to $1,025 from $925).

How can I combat UPS and FedEx rate increases?

Shipping is going to continue to get progressively more expensive for your business unless you do something to push back. 

Lojistic’s free cost savings automation and analytics platform will help your business control and reduce shipping costs. If you’re tired of paying astronomical shipping invoices, create your free Lojistic account today.  

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