UPS Shipping Rates Plummet Thanks to Expert Advice

Author: Bryan Van Suchtelen
April 25, 2019

UPS Shipping Rates Versus FedEx

UPS shipping rates are similar when you compare them to FedEx shipping rates. There aren't any certain rates that are different between UPS and FedEx.

This is unless you are looking at some of the surcharges. UPS and FedEx are different in:

  • Residential surcharge
  • Delivery area surcharge
  • Any oversize fees
  • Large package fees
  • Over-max fees

You can look at those and compare FedEx and UPS to each other. You will see that the naming conventions might be different. Some of the charges might be more or less expensive with one carrier over another. When you're looking at your bottom line, you want to make sure that you account for the difference in cost. And knowing that a 50% discount on a surcharge with UPS equates to about a 45% discount with FedEx. This is if that surcharge is less expensive with FedEx. In some cases, there is a pretty large disparity in the two carriers right now. In particular, this is the case with the weight-related or size-related surcharges.

One thing you might want to look out for with UPS is the late payment fee. This is in addition to a shipping change correction audit fee that UPS decided to put in place last year as well. That's affecting a lot of customers. Say that you're not inputting all your dimensions on the boxes. And that you're getting hit with shipping change corrections. This means that a shipping change correction audit fee will affect you. So you want to make sure you take that into account when you're looking at your invoices.

Getting an Auditor and Looking Over Your Charges

If you don't have an auditor that's helping you with that, it might be good to actually take a look at all your charges. You might think about getting an auditor to help you with those. As every year goes, both carriers, UPS and FedEx raised their rates at the end of the year.

The UPS rate change actually went into effect the last week of the last year. In contrast, FedEx changes went into effect the first week of this new year. It's obvious that UPS has a little bit of an advantage there. UPS collected all the extra revenues at 4.9% average rate increase that they purported. They were able to grab that at the end of the year with all the returns for the holiday season. While both went into effect at the end of every year, they always announce their rate change. They have different timelines when they put those new charges in place. But the last time that UPS had a rate change and increased their rates was at the end of last year.

How the Lojistic Platform Can Help

The Lojistic platform and the Lojistic third-party shipping system will definitely help you. Not only will it reduce your rates right off the bat, but it will also compare the rates between FedEx and UPS. You could be paying less with one of the carriers, depending on your discounts with both of them. The system looks at all the charges that might be applicable to that particular package. It looks at all the characteristics, any surcharges that might apply, and then it gives you the net result. This becomes your bottom line charge that you get charged.

You also have to consider any time-in-transit requirements that you might have. This includes any certain service-level agreement you have with the customer. So it takes into account the time-in-transit as well. It will also calculate the time-in-transit. And it will calculate the cost between both carriers, FedEx and UPS. It looks at your net rates and then gives you the bottom line cost. While it doesn't lower your rates, if you've got net rates with both carriers it will give you the bottom line cost. Then, you'd be able to pick and choose the rate that's the less expensive.

Author

Bryan Van Suchtelen

Bryan Van Suchtelen

Corporate Director of Parcel Rate Services

With more than 34 years of parcel experience, Bryan Van Suchtelen is the Corporate Director of Parcel Rate Services at Lojistic, one of the nation’s top logistics and transportation cost management companies.

Prior to joining Lojistic in 2015, Bryan enjoyed a 26-year career with UPS where his roles included Pricing, Field Sales and Director-level Sales Management of some of UPS’s largest customers.

At Lojistic, Bryan leverages his wealth of experience/expertise to identify and execute supply chain cost management solutions for parcel shippers of all sizes. Bryan has helped his customers reduce their shipping spend by tens of millions of dollars.
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