UPS recently announced they had their most profitable year ever - and there’s still a quarter of the year remaining! In just 9 months, “UPS has generated more operating profit than any full year in our history,” according to UPS CEO Carol Tome. Let that sink in the next time you’re paying your UPS invoices.
But just because UPS is having a historically lucrative year doesn’t mean price breaks are coming any time soon for their customers.
In fact, quite the opposite. It’s only going to get more expensive to ship with UPS due to their Q4 seasonal surcharges and impending 2022 general rate increase which was just announced at 5.9%. You can learn more about peak holiday shipping season here.
In 2021, UPS has earned $8.9 billion in operating income, up 58% from the same period of 2020. So why has 2021 been UPS’s most profitable year to date? According to this article, “prices are rising at the fastest 12-month pace since 2008, and supply chain bottlenecks plus a labor shortage are only putting more pressure on costs.”
October - December (Q4) is always the busiest - and usually the most profitable - time period for UPS. By the time 2021 is over, UPS will have set an incredibly high bar for profits. As shareholders continue to expect similar results, UPS will undoubtedly continue to find new ways to maximize their ability to make more money from their customers.
One of the ways UPS plans to keep the gravy train rolling is to raise rates, once again, with a 5.9% general rate increase for 2022.
So even after a year of eye-watering profits, UPS will raise their rates even MORE than they did last year (the rate increase from 2020 - 2021 was 4.9%). That means that in just two years, UPS rates will have gone up by over 10%! And while the advertised increase for 2022 is 5.9%, shippers typically end up paying much more due to surcharges and other accessorial fee increases.
You can download this free report with additional detail. Once the carriers (UPS and FedEx) release the remaining details of the General Rate Increase (GRI) you’ll automatically receive the 2022 version.
It’s been a great year if you’re UPS, but if you’re a business that relies on UPS - not so much.
If you’re concerned you may be overpaying for UPS’s services, create a free Lojistic account to see how much you could be saving on shipping.
Lojistic’s free cost savings automation and analytics platform provides UPS (and FedEx) shippers with a DIY path to savings. All you have to do is create your free Lojistic account.
And if you’d like additional assistance recovering credits for invoice errors, securing best-in-class rates, or managing your carrier invoice payment process - there are a number of ways Lojistic can help you push back against UPS’s rising costs.