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UPS’s New Rate Increases to Hit During the Holiday Season

UPS is not waiting until 2018 to implement some of its rate hike.  In fact, a price increase to a large part of its shipping services will take effect on December 24, 2017, right in the middle of the holiday shipping season. The higher shipping rates will help the company capitalize on the post-holiday returns rush, and their peak season surcharge will take advantage of the busiest shipping days of the year.  The company said the rate increases are necessary to meet the demand of their customer base and the growth of ecommerce shipping.

Rate Increases

Effective December 24, 2017, the following UPS rates will change:

  • UPS Ground, UPS Air and International services will increase net 4.9%. UPS Air Freight between the U.S., Canada, and Puerto Rice will also increase by this amount.
  • The Large Package Surcharge will be applicable on any domestic package over 96 inches in length or a length plus girth more than 130 inches.
  • The DIM weight divisor will be 139 for all U.S. Domestic packages less than or equal to one cubic foot.
  • UPS Freight rates will increase by an average net of 4.9%.

Effective July 8, 2018, the following UPS services will change:

  • The Large Package Surcharge for any U.S. Domestic package will be $90 for a residential delivery.
  • The Additional Handling Surcharge will be $19.00 for any domestic package over 70 lbs. in actual weight.

Shippers using Ground Services will see increases between 4.5% and 5.5% on average.  For a package that weighs between 1-5 lbs., for example, the average increase is 4.5%.  Most weight groups, with the exception of lightweight packages, will be about 5% higher for Next Day Air Services.  The Lightweight SurePost packages that are less than 10lbs will see greater rate increases in the range of 7-8%.

Holiday Surcharges

Shippers will also be getting hit with peak season charges during certain dates during the holidays before the new rate increases even take effect.  The company has implemented higher rates for peak season, as shown in the chart below.  Between November 19th and December 2nd, and again from December 17th-23rd, every package sent via UPS Ground will be $0.27 more expensive.

UPS said that these peak season increases were needed because the cost of shipping, including hiring more employees and additional transportation costs, is higher during peak periods.

Ecommerce shoppers and shippers should keep in mind that UPS’s last day for2nd Day Air packages to arrive before Christmas is Wednesday, December 20th since Christmas falls on a Monday.  If UPS Next Day Air is necessary, expect to pay an additional $0.81 per package.  Shippers need to be aware and be transparent to their ecommerce customers to avoid disappointment in delayed gifts.