UPDATE: Use this link if you're looking for 2022 rate increase information.
This week, UPS announced their 2021 rate increase, which will be made effective in January of 2021.
This announcement comes almost two months after FedEx announced its 2021 rate increase. See the details of FedEx’s rate increase here.
Both carriers continue to increase rates and roll out new surcharges/fees despite posting record earnings over the past several months.
Additionally, neither of the “big two” carriers have reinstated a shipper’s ability to file for late shipments. And as of today, there is no set timeframe for when their service guarantees will be reinstated. What gives?!?
So how will UPS’s 2021 rate increase impact your business? Well, it’s no surprise that UPS mirrored FedEx’s price increase in the following areas:
- 4.9% average increase for Ground, Air and International
- Minimum charge for a zone 2, 1lb ground package is increasing from $8.23 to $8.76 (increase of 6.05%)
- Additional Handling charge will be applied to any package with a combined length plus girth that exceeds 105 inches
- Over Maximum (known as “Unauthorized” with FedEx) is increasing from $875 to $920
- Across-the-board surcharge increases
What is a surprise, however, is that UPS will be changing how they apply their Additional Handling and Large Package Surcharges:
- Effective April 11, 2021, Additional Handling and Large Package Surcharges for non-hundredweight service packages will differ by zone
- Effective July 11, 2021, Additional Handling and Large Package Surcharges for hundredweight service packages will differ by zone
Essentially each of UPS’s most common surcharges will see increases, which means your net effective increase could be much higher than 4.9%.
So, should you allow UPS to increase your rates without any recourse?
Your free Lojistic account takes less than a minute to create, and provides the information necessary to measure the impact of UPS’s upcoming price increase so you can decide whether it’s best to push back or concede. If you already have a Lojistic account, log in now.
And if you need support in determining how this increase will impact your business in 2021, we’re here to help.
P.S. Be on the lookout for our annual “General Price Increase History” whitepaper, which will be released in the coming weeks.