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Fedex and UPS Raising Rates in 2017

October 20, 2016
5 min read
Industry News
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FedEx and UPS trucks

In early September, UPS announced rate increases for 2017. Beginning December 26th, Ground service in the U.S. will increase an average of 4.9%. UPS Air Freight rates within and between the U.S., Canada and Puerto Rico, will also increase by 4.9%.

Effective September 19, 2016, UPS Freight announced an average 4.9% general rate increase. In addition to the general rate increases, an additional handling surcharge will apply to any package with the longest side exceeding 48 inches, instead of the current 60 inches for all Air and International packages. The additional handling charge is increasing by $0.35. This surcharge will also be applied to SurePost packages effective January 18th, 2017.

Late last month, FedEx followed suit and announced that, beginning January 2, 2017, shipping rates will be increasing by an average of 3.9% for U.S. domestic, U.S. export and U.S. import deliveries. FedEx Ground and FedEx Home Delivery will increase by an average of 4.9%.

In addition to the general rate increases, FedEx also announced a change to its weight advisor as well as additional surcharges. FedEx Express and FedEx Ground U.S. domestic dimensional weight advisor will change from 166 to 139. The FedEx Freight extreme length surcharge will change from $88 to $150 and be applied to packages exceeding 12 feet. The current length is 15 feet. Fuel surcharges will also be adjusted weekly versus monthly.

What the Increases Mean for You

While the general rate increases will be painful for shippers without custom parcel agreements, the biggest impact on Ground customers will come from the dimension weight change. Prior to 2011, the dimensional advisor was 194. Today, it is 166. Beginning January 2, 2017, it will be 139. To put this into perspective, consider you have a ground shipment which measures:

24x12x24 and weighs 30lbs

Today the dimensional weight of that package with a 166 Dim Factor is 41lbs. Under the new 139 factor, that same package will be rated at 50lbs. In this case you would be looking at an18% increase.

With the steady increase in the cost to ship a package, it’s now more important than ever to understand how custom parcel agreements could be saving you tens or hundreds of thousands on your annual shipping costs. If your company has an existing parcel agreement, now is the perfect time to have it reviewed ahead of these price increases. Learn how Amware and ParcelRate are saving customers millions on parcel shipments today.

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