FedEx, UPS, and USPS 2021 General Rate Increases

FedEx, UPS, and USPS 2021 General Rate Increases

UPS announced their 2021 rate increases will be made effective on February 22, 2021.

The increases came just months after the FedEx and USPS announcements of upcoming rate increases. This is normal as FedEx and UPS routinely announce increased rates and new surcharges and fees despite record numbers for the previous year from all 3 carriers.

They have referenced COVID-19 and the heightened number of residential deliveries as the basis for rate increases.

We will break down the rate increases announced by UPS, FedEx, and USPS for 2021 and provide additional insights into managing these increases. See the highlights below:

UPS

• Average increase of 4.9% for Ground, Air, and International
• An additional Handling charge will be applied to any package with a combined length plus girth that exceeds 105 inches
• Over Maximum (known as “Unauthorized” with FedEx) is increasing from $875 to $920
• Effective April 11, 2021, Additional Handling and Large Package Surcharges for non-hundredweight service packages will differ by zone
• Effective July 11, 2021, Additional Handling and Large Package Surcharges for hundredweight service packages will differ by zone

In addition, UPS has added accessorials having to do with Brexit. Here are the key conclusions that can be drawn:

• For UPS customers who decide not to renegotiate their worldwide rates post-Brexit, there will be a UK Border Fee accessorial when shipping between Northern Ireland and UK Mainland
• Shipments between UK Mainland and European Union will move from Transborder rates to Worldwide Rates, but shipments between Northern Ireland and European Union will remain Transborder
• Shipments between Northern Ireland and UK Mainland will continue to use domestic rates and services but will require customs clearance

Takeaway: The price increases will particularly affect low weight ground packages and long-distance air packages. UPS will continue to discourage large parcel packages that require special handling.

FedEx

• Average increase of 4.9% for FedEx Ground and FedEx Home Delivery
• Average increase of 4.9% for FedEx Express package and freight for the U.S., and export and import services
• Zone-based shipping rates for FedEx Freight will increase between 4.9% and 5.9% depending on the specific zone
• FedEx Express, FedEx Ground, FedEx Home Delivery®, FedEx SmartPost®, and FedEx Freight rates will increase
• FedEx will implement a 6% late fee for Express and Ground invoices not paid within payment terms
• Changes to how the fees are assessed for Additional Handling Surcharge for FedEx Express and FedEx Ground packages
• High-Cost Service Area Surcharge for certain FedEx Freight shipments
• Changes for how the fuel charges will be assessed for U.S FedEx Express Freight shipments

Takeaway: If you are a shipper that ships large packages, pays late, ships low weight ground or residential packages, ships two or three-day express, or uses a large amount of a la carte services, it is expected that you will see an increase larger than 4.9%. In addition, express services will have larger increases for longer zones than shorter zones.

USPS

• Average increase of 2.5% for Priority Mail Express
• Average increase of 4.2% for Priority Mail
• Priority Mail Flat Rate fees are increasing across the board from $0.25 to $1.00 (3.5% to 5.46%)
• An overall increase of 6.5% for First Class packages
• Average increase of 4.9% for destination delivery unit entered parcels
• Average increase of 10.7% for destination sectional center facility entered parcels
• Average increase of 9.7% for destination network distribution center entered parcels
• Average increase of 3.57% for Media Mail
• Parcel Select Ground has increased 1.3% and Parcel Select Lightweight average prices are increasing by 20%
• Similar to UPS’s additional handling charge, an overweight/oversize surcharge of $100 will be added for packages that exceed the 70 lb. maximum weight limitation or the 130-inch length plus girth maximum dimensional size limit.
• Rate increases for U.S. territories are increasing by 4.95% or more
• A signature confirmation has an average increase of 1.9% and intercept fees are up by 3.8%

Takeaway: Expect to pay more for lightweight parcels (upwards of 19%) but enjoy lower year over year increases on packages using the full USPS network. Unlike some other shippers, USPS does not add surcharges or additional fees for fuel, residential delivery, or regular Saturday delivery.

Saving Costs While Maintaining Speed

Shopping early and expecting to pay more was the mindset for 2020. As you look into your plan for 2021, creative solutions will be necessary to save on costs while maintaining speed. This could include onboarding regional carriers, a wider scope of inventory sources, and upgrades to shipping technology. The new year provides the time and opportunity to make these changes.

With ProShip, the UPS and USPS rates will automatically be updated inside the software through the updater tool. FedEx rates for both list and negotiated rates are handled by FedEx’s software, either through the FedEx Ship Manager Server or FedEx Web Services.

If you are a ProShip customer, no additional actions are needed and you will see the 2021 rates in the platform with no downtime. As ProShip has been a long-time partner for all 3 of these carriers, we can boast unmatched service and support for a fully integrated and cohesive solution.

Savvy shippers know that their shipping profile is complex and unique – for that, you need a company with unmatched service and support and proven, scalable shipping software – ProShip.

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