Shipping with UPS and FedEx continues to get more and more expensive - especially during the holidays.
Editor’s Note: We’ll continue to keep this post updated with new information as it’s released by UPS and FedEx throughout the peak holiday season. Bookmark this page and check back often to stay informed.
Original post date: September 9, 2021 | Updated: November 8, 2021.
Here’s What You’ll Get From This Blog Post
- Peak Season Checklist. Be Prepared & Save!
- Key Shipping Dates to Be Aware Of
- 2021 Holiday Season Expectations Surcharges & Fees
- Annual Rate Increase Information
What has now become an annual ‘holiday tradition’, another General Rate Increase (GRI) is right around the corner. If you ship with UPS and/or FedEx, your rates will be increasing, once again, in 2022. Not to worry...Lojistic will help you determine the impact.
Surcharges, Fees and Changes Leading Into Peak Season
Throughout 2021, we’ve seen more fees and surcharge increases rolled out during atypical times of the year. While guaranteed deliveries were partially reinstated (on a limited basis), shippers were still left to grapple with ever-growing costs and continued uncertainty.
Many businesses struggled to answer the question: Who pays for rising shipping expenses? Does the business absorb the costs, sacrificing profit margins, or should the costs be passed to their customers?
Consumer expectations and behavior add complexity. Customers expect their orders fast and free. Often, shipping costs are motivation for potential buyers to abandon their cart.
That’s why so many businesses have turned to Lojistic - the only free cost savings automation and analytics platform designed to help control and reduce shipping costs - despite the increases in rates, fees and surcharges.
So, what can we expect for 2021 peak shipping season? For starters, your packages are going to cost more to ship. That shouldn’t come as a surprise because it’s true for every peak season (Captain Obvious, right!).
The carriers will both point to supply chain capacity issues as the reason to restrict package volumes and implement surcharges and fees. The more you know about the true impact of higher costs, the better prepared you’ll be to make the necessary adjustments. We’ve created a helpful checklist for you to prepare for the peak holiday season. We’ll also continue to update this post with new information as it becomes available.
How Can I Prepare for the Peak Shipping Season?
There are plenty of ways to best prepare your business for the peak holiday shipping season. While every business is different, and therefore has different shipping demands, costs and challenges, there are some universal best practices that’ll help you control and reduce your potentially exorbitant seasonal shipping expenses. Creating a free Lojistic account is the first step in controlling and reducing shipping expenses.
We’ve created this handy checklist to help you mitigate overspend during the holidays.
Get Your Holiday Shipping Checklist Here
Your business can also save some money by getting free shipping supplies from USPS, FedEx, UPS and/or DHL. This post and guide from Supplied! is really helpful, and provides businesses with the resources needed to get free or cost-efficient packaging materials.
Peak Holiday Season 2021 Rates, Surcharges, Fees & Restrictions
UPS Peak Surcharges:
- July 4, 2021 - October 2, 2021
- Peak Additional Handling Surcharge: $3.50 per package (up from $3.00)
- Large Package Surcharge: $40.00 per package (up from $31.45)
- October 3, 2021 - January 15, 2022
- Peak Additional Handling Surcharge: $6.00 per package (up from $3.50)
- Large Package Surcharge: $60.00 per package (up from $40.00)
- Over Maximum Limits: $250.00 per package
- October 4, 2021 - January 16, 2022
- Peak Additional Handling Surcharge: $5.95 per package (up from $3.50)
- Peak Oversize Charge: $62.50 per package (up from $30.00)
- Peak Ground Unauthorized Package Charge: $350.00 per package
- Peak Surcharge (FedEx Ground Economy formerly FedEx SmartPost)
- November 1 - 28, 2021: $1.50 per package (up from $1.00)
- November 29 - December 12, 2021: $3.00 per package
- December 13, 2021 - January 16, 2022: $1.50 per package
- Residential Delivery Charge (Express & Ground U.S. Domestic Residential Packages)
- Beginning January 17, 2022: Additional $0.60 per package - this doesn’t apply to all FedEx shippers** (click here to see criteria detail)
- Money-Back Guarantee (MBG) Suspension
- November 1, 2021 - January 16, 2022: applies to all parcel and freight services in the United States and Canada (click here for additional detail)
Peak Holiday Season Key Stats
Peak holiday season shipping restrictions, fees, surcharges and guaranteed delivery suspensions are well-known to those that ship. But do you know the true impact of seasonal fees and surcharges? With Lojistic, you’ll be able to manage and monitor your costs during Q4 and beyond.
Based on the past few years of data, regular surcharge net spend increases by an average of 20% between Q3 and Q4 (peak season). We typically see a peak surcharge increase of 25% in that same time period. But 2021 is a little different. Knowing that peak surcharges increased by a larger amount in 2021, when compared to previous years, peak surcharges are more likely to increase by 30% - 35% in Q4.
If you want to mitigate the impact of surcharges, or simply be aware of the true cost peak holiday season shipping expenses have on your business, create a free Lojistic account.
What Keep Shipping Dates Should I Be Aware Of?
If you want to ensure your packages are delivered on or before Christmas, there’s a number of dates you should be aware of. But don’t worry - we’ve created a helpful calendar so you can easily keep your dates straight!
As usual, UPS and FedEx won’t be “guaranteeing” deliveries during peak holiday season (aka, they won’t refund you for late deliveries); however, you can use our helpful guide that details the dates and service levels required for both carriers in preparation for on-time holiday delivery.
Get Your Holiday Shipping Guide Here
When will the 2022 annual General Price Increase be announced?
UPDATE: According to Yahoo Finance, FedEx will increase rates for its Express, Ground and Freight services. FedEx Express shipping rates for U.S. Domestic, export and import services will go up by an average of 5.9% for 2022. Read the announcement from Yahoo Finance here.
Last year both UPS and FedEx announced a 4.9% increase for 2021. This increase applied only to the weight/zone rates for their Air, Ground and International services and was made effective December 27, 2020 for UPS and January 4, 2021 for FedEx. Keep in mind, the advertised (4.9%) increase can be misleading, as it is an average. A shipper’s actual increase will vary according to weight/zone characteristics and service levels used. Additionally, the advertised increase does not factor in the increases to all accessorial surcharges, which are typically higher than the 4.9% average.
As soon as UPS announces its 2022 rate increase - typically that announcement is made in September each year - we’ll update our comprehensive annual General Price Increase guide that provides the details you’ll need to better understand how the rate increase will impact your business. We'll also provide additional detail on FedEx's September 21 announcement.
If you create a free Lojistic account, we’ll send you the General Price Increase guide via email. However, if you’d just like to download the free guide, visit the General Price Increase download page here. The download page will be updated once the new rates are announced.
Create a Free Lojistic Account to Manage, Monitor and Save
With Lojistic, you’ll have all the information you’ll need to manage and monitor the impact of seasonal surcharges and fees. Once you’re equipped with this information, you’ll be able to mitigate the rising costs with smart shipping decisions. You’ll also be able to see how much your existing rates could be improved. If you need some help we’re available by phone at 800.783.5753 or email at hello@lojistic.com or you can have us give you a call at a time that's convenient for you. We’re always happy to help shippers navigate the seasonal changes.