Ah, the sweet sound of holiday bells ringing! Oh wait, that’s not bells—it's the sound of UPS announcing its 2025 General Rate Increase (GRI), and it’s coming in hot with a 5.9% hike starting December 23, 2024. Just in time to ruin your holiday spirit, right?
On October 10, UPS decided to roll out the red carpet for the holiday shipping rush by making sure businesses have a little extra holiday cheer in the form of increased shipping costs. Who doesn’t love a surprise present of inflated rates just when they’re gearing up for a frantic season of gift deliveries? UPS claims this increase is “to support ongoing expansion and capability enhancements.” You know, because nothing says “enhanced capability” like your business getting nicked a little harder every year.
UPS hasn’t yet posted all the numbers for the coming year, but here are a few highlights from their announcement:
Credit Card Surcharge: A Holiday Gift You Didn’t Ask For
In addition to the GRI, UPS is introducing a 2% surcharge on invoices paid via credit card starting October 26, 2024—announced a mere two weeks before its implementation. This adds further pain to the already burdensome peak season surcharges that many businesses are grappling with. There’s little doubt that this is an effort to boost UPS’s fourth-quarter numbers, and if customers allow it, this surcharge will likely carry on indefinitely into the new year and beyond.
Zip Codes and Area Rates: Changes Ahead
Another update involves changes to the list of zip codes subject to Area Surcharges, effective October 21, 2024. However, UPS has yet to provide specific details on which zip codes will be affected, leaving businesses to wait and see how their shipping costs might be impacted. These changes could also affect transit times and zones, potentially disrupting delivery schedules.
Additional Handling Charges: New Weight and Volume Rules
Also starting October 21, 2024, UPS will introduce a minimum billable weight of 40 lbs for Additional Handling Surcharges (AHS). This will apply even to lighter packages, making them more costly to ship.
Further changes coming on January 27, 2025, include the use of cubic measurements for calculating AHS charges. This will be based on the total volume of packages rather than just their dimensions, and the factor that results in the highest surcharge will be used. Businesses will need to adjust their cost calculations accordingly.
Conclusion: Preparing for Increased Shipping Costs
The UPS 2025 GRI signals a continued rise in shipping costs, which could pose challenges for businesses during the holiday season and beyond. Staying ahead of these changes and planning carefully will be key to managing shipping expenses and maintaining margins in the months ahead.
You may have read about the recent 2025 FedEx rate increase as well.
This is just a summary of what has been announced so far. We will share additional details as they become available.
If you have concerns about any of these upcoming changes, reach out to Lojistic for a free analysis to determine what steps can be taken to mitigate and even avoid some of these looming surcharges, increases, and additional pain points.
Contact us to see how:
(800) 783-5753
hello@lojistic.com
Wishing everyone smooth shipping!
Author
Bryan Van Suchtelen
Bryan Van Suchtelen
Corporate Director of Parcel Rate Services
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.