Here is what to expect from UPS:
- an average net increase of 5.9% for UPS Ground, UPS Air, and International services; and
- an average net increase of 5.2% for UPS Air Freight within and between the U.S., Canada, and Puerto Rico
In addition to the overall price increases, UPS is continuing to punish large package shippers with its pricing efforts. The message is clear: if you want to ship large packages at UPS, you will pay a premium to do so. The large package surcharge will increase within the 8%-16.7% range and the additional handling weight/dimensions will increase from 5.2%-13.9% depending on zone. And the majority are increasing by more than the announced 5.9%.
For all retailers, UPS is also continuing to penalize lightweight shippers, with ground minimum charges increasing 6.9%, from $8.76 to $9.36, with 1 pound-to-5 pound packages to increase by almost 8%, with most of the largest percentage changes in the lower weights and fairly consistent across zones.
Additional charges Increases: Delivery Charges; Pickup Charges Remote/Extended Delivery and Pickup Charges; Residential Surcharge; Return Services w/ Pickup; Saturday Delivery and Pickup; Signature Required Services; Additional Handling, Large Package and Over Maximum Limits; Oversize Pallet Handling Surcharge; and Peak Surcharges.
UPS confirmed what most of the marketplace has already concluded – UPS is focused on driving profits first and is far less focused on maintaining relationships with their customers. Increases for 2022 will be larger than those in the past and this “peak” is highly unlikely to end anytime soon.
Here is what to look for from FedEx:
FedEx’s rates will increase by an average of 5.9%. Premium services will experience higher increases than Ground, especially in shorter zones.
- Priority and Standard Overnight shipments for zones 2-4 will increase by 7.1% or more.
- Express Saver rates for zones 2-4 will increase by as much as 9.8%.
- Ground service rates will increase by about 6.0% across all zones.
What about the Ground minimum?
That’s changing from $8.76 per package to $9.36 per package – an increase of 6.8%.
How will the Residential surcharge be impacted?
More shippers will trigger the post-peak Residential surcharge. Plus, that surcharge will cost considerably more:
- Shippers will trigger the Residential surcharge sooner – when they hit 25,000 packages rather than last year’s threshold of 30,000 packages.
- The $0.60 per package Residential surcharge that will go into effect for high-volume weekly shippers on January 17, 2022 represents a 100% increase over last year’s $0.30 post peak Residential surcharge.
What about the Ground minimum?
That’s changing from $8.76 per package to $9.36 per package – an increase of 6.8%.
How will the Residential surcharge be impacted?
More shippers will trigger the post-peak Residential surcharge. Plus, that surcharge will cost considerably more:
- Shippers will trigger the Residential surcharge sooner – when they hit 25,000 packages rather than last year’s threshold of 30,000 packages.
- The $0.60 per package Residential surcharge that will go into effect for high-volume weekly shippers on January 17, 2022 represents a 100% increase over last year’s $0.30 post peak Residential surcharge.
What’s happening with the Additional Handling and Oversize surcharges?
FedEx’s Additional Handling and Oversize surcharges are both changing from flat fees to zonal ones. And depending on how far packages ship, it could wind up costing companies up to 38% more than they’re currently paying.
- Only Zone 2 shipments will cost a bit less (just $0.25) for Additional Handling in 2022.
- For Zones 3+, all other Additional Handling charges will see prices ranging from:
o $17.50 to $21.50 for dimensional (up 9.3 – 34.3% from this year’s charge of $16.00)
o $27.50 to $31.50 for weight (up 7.8 – 23.5% from this year’s charge of $25.50)
o $16.00 to $18.00 for packaging (up 14.3 – 28.6% from this year’s charge of $14.00) - Customers of U.S. Express and FedEx Ground will pay Oversize surcharges of anywhere from $110.00 to $145.00 per package (up 4.8 – 38.1% from this year’s charge of $105.00).
- FedEx Home Delivery customers will be charged anywhere from $135.00 to $170.00 per package (up 3.8 – 30.8% from this year’s charge of $130.00).
Are there any new surcharges?
FedEx has also added several new charges – or modified existing ones – to make the terms more favorable for its bottom line. For example:
- Ground Economy (formerly called SmartPost) shippers will also be subject to a new $1.00 per package surcharge for any package that is classified as “delivered or returned.”
- The International Out-of-Pickup-Area and Out-of-Delivery-Area surcharge will be based on a tiered zip code list.
There is a silver lining in the shipping marketplace. Companies like AirTerra are the answer to the aggressive price increases and unilateral capacity caps hitting retail and DTC brand shippers by the duopoly. AirTerra built a nationwide delivery network that provides a super reliable,
cost-effective option for zones 6-8 parcel shipping as well as the shorter zones – whether you need more capacity, more reliable delivery times, or just a more competitive price.
In summary, retailers shouldn’t wait until peak season is over to avoid high shipping costs, because additional charges await you in 2022. It’s time to utilize companies like AirTerra rather than wasting more money with the duopoly.
