Last month, FedEx announced a rate hike of 5.9% for 2025. As expected, UPS followed through with a similar increase. But the changes aren't a one-for-one match. Today, we'll talk about the UPS rate increases, when they take effect, how they differ from the FedEx changes, and how you can mitigate your financial impact.

The UPS 2025 rate increase is coming earlier than expected

While FedEx's rate increase takes effect on January 6, 2025, UPS is implementing theirs on December 23, 2024— a time when holiday surcharges are still in effect. (Those demand surcharges last until January 18, 2025.)

UPS 2025 rate hike

UPS has announced an average increase of 5.9% on its Ground, Air, and International services. The actual rates depend on the service used, package size and weight, delivery location, and more.

The UPS website explains the increases: "This helps to support ongoing expansion and capability enhancements as we strive to maintain the high service levels you expect from UPS."

What else can I expect from UPS for the rest of the year and in 2025?

In response to decreased demand, UPS is getting creative in building revenue. On October 20, UPS updated the list of cities that would incur additional surcharges— adding to the list from earlier in the year.

Do you pay your UPS invoice with a credit card? You can expect an additional surcharge equal to 2% of the total amount paid for all invoices paid on or after October 26, 2024.

In addition to the rate hike, UPS announced its plan to update its Large Package Surcharge (LPS) and Additional Handling Charge (APC) on or after January 27, 2025. The LPS will be computed based on "revised calculations based either on length, weight or cubic volume of shipments." The AHC is currently determined by calculating length plus girth. In January, that will be replaced by a cubic volume definition.

How will these new rates impact my 2025 UPS invoices?

Will you be responsible for the full 5.9% rate increase and the updated calculations of the LPS and APC? The answer lies in an asterisked statement on the UPS new rate announcement: "The impact of these changes on your shipping costs will vary according to your shipping characteristics and the terms of your UPS agreement."

In short, whether these rate hikes will impact you depends on the quality of your contract.

If you haven't recently negotiated your contract or did it without professional help, there's no better time to check whether your contracted rates align with industry standards.

The team at ShipRx has decades of experience in the shipping industry— first working for the carriers and now helping businesses like yours get the best possible rates on their UPS and FedEx contracts.

Sign up for a free ShipRx savings analysis today and discover your potential shipping savings. You won't pay a cent until you're saving money, so you've got nothing to lose— except high rate hikes in 2025!