UPS announces planned 2024 rate increases

Following the lead of its biggest competitor, FedEx, whom announced 2024 rate hikes in late August, Atlanta-based global freight transportation and logistics services provider UPS followed suite last week, in announcing its 2024 rates.

UPS officials said its 2024 rates will go into effect on December 26.

“This helps to support ongoing expansion and capability enhancements as we strive to maintain the high service levels you receive from UPS, the company said.

Effective December 26, UPS said that rates for UPS Ground, UPS Air, and International services will increase by an average net 5.9%, which are in line with FedEx’s planned 2024 rate increases. For air cargo, effective December 3, UPS Air Freight rates within and between the U.S., Canada, and Puerto Rico will increase by an average net 6.3%.  

UPS also said that rates for certain Value-Added services and Other charges will increase, effective December 26. For example, a Zone 2 Additional Weight Handling rate will increase 16%, from $29.00 to $34.50. And Zone 2 Dimensions (Length, Width, Length+Girth), will increase 16%, from $18.50 to $22.00.

What’s more, UPS stated that effective December 26, an Additional Handling fee will be applied to international shipments weighing 55 pounds or more. It also noted that where a commercial fee is submitted in connection with a shipment, a fee of up to $5.00 per shipment will be applied to the shipper when the commercial invoice is not provided by the shipper in digital form using UPS Paperless Invoice services prior to the processing of the commercial invoice by UPS.

An analysis of 2024 UPS and FedEx rate increases by Paul Yaussy, senior consultant for San Diego-based parcel consultancy Shipware, observed that nearly all common surcharges will increase significantly more than the announced matching 5.9% GRI.

“Most read the headlines, or the email from their carrier rep, and think all their rates are increasing 5.9%,” he wrote in a blog posting. “If you are not careful, you can blow your parcel budgets with this thinking because the annual GRI announcement does not limit surcharges to the 5.9% rate increase. Again, this year, most common surcharges will increase significantly higher than 5.9% and, depending on your specific profile, may be extremely detrimental to your parcel pricing. Surcharges make up between 20% and 40% of a parcel shipper’s annual spend. So, it’s critical you understand the impact of these increases. Of note, shippers of large packages will once again be severely impacted by the 2024 increase. Additional Handling surcharges and Large Package surcharges are increasing 19.5% on average.”

Jerry Hempstead, president of Orlando-based Hempstead Consulting, told LM that in looking into the details of UPS’s new rates the company did what it has done in the past and added far more than 5.9% doing two things.

“First, most accessorial charges took a large increase,” he said. “Additional Handling and Oversize took double-digit increases. Forget not that the fuel surcharge is added to these surcharges (Ground is currently over 16%). The surcharge that will affect most parcel shippers is the Delivery Area Surcharges. These surcharges have been going up more than 5.9% and this year more than 7%. But the second detail hidden in all this is that UPS changed the classification of many zip codes, both in zone application and identification as extended.”