UPS faces a catch-22: match FedEx and sacrifice margins or boost margins and potentially lose customers.

With their announcement on September 8, they made their choice clear. UPS will focus on keeping current customers and winning new ones with a 5.9% general rate increase for 2024.

In today’s blog post, we’re telling you everything we know about UPS’s rate increase, when it goes into effect, and how you can combat high parcel prices in 2024.

When does the 2024 UPS general rate increase go into effect?

On December 26, 2023, UPS’s 2024 rate increase goes into effect for its Ground, Air, and International services. As is typical, that’s almost a week ahead of FedEx’s January 1 start date.

How will UPS afford the union pay increases?

The carrier owes just under $30 billion over the course of the unionized workers’ new contracts, so they can’t afford to rely on a 5.9% rate increase alone for profits. Instead, UPS will compensate with higher demand surcharges from October 1, 2023 – January 13, 2024.

Here are a few examples:

• Additional Handling Surcharges will increase from $3.50 per package to $6.90 per package
• Large Package Surcharge will increase from $40 per package to $74.90 per package
• Over Maximum, which is usually free, will cost $410 per package

The carrier will implement demand surcharges for UPS SurePost, Ground Residential, Next Day Air Residential, and all other Air Residential customers who were billed for more than 20,000 packages during any week following October 2022. These demand surcharges, ranging from $1.35 to $7.50 per package, are levied on parcels sent between October 29, 2023 – January 13, 2024, that exceed 105% of the shipper’s weekly average volume from June 2023.

Rates are increasing, but what does that mean for you?

A message on the UPS website explains the increase: “This helps to support ongoing expansion and capability enhancements as we strive to maintain the high service levels you expect from UPS.”

At ShipRx, we believe you deserve high service levels at the lowest price possible. However, after reviewing thousands of shipping contracts, we know that far too many companies are paying too much for shipping.

It’s not their fault. Most businesses don’t have access to industry standards for shipping costs and assume that the carriers have all the negotiating power. The team at ShipRx has over 30 years of experience in the shipping industry, and our quick, free savings analysis will identify areas where you can save money on shipping, recoup costs on failed deliveries, and identify service improvements.

Through parcel audits, most of our clients see refunds in the 2-3% range, while contract negotiation services typically see a 20-30% reduction in shipping costs.

Sign up for your free savings analysis today and combat the UPS 5.9% general rate increase with savings.

James Founding Partner