UPS and FedEx Raising Their Rates by An Average Of…
…4.9%. FedEx and UPS have both zeroed in on a 4.9% increase in their 2018 shipping rates. Many of FedEx’s rate increases will take effect on January 1, 2018. UPS, however, will implement the majority of their fare hikes on December 24th of this year.
A spokesperson for UPS stated, “This supports ongoing expansion and capability enhancements as we strive to maintain the high service levels you expect from UPS.”
No matter the reason, this is going to have an impact on your business’s bottom line. And, although an annual shipping increase may not come as a surprise, it’s still worth your attention. They say knowledge is power and, in this case, knowledge enables preparedness.
As we wrap up one fiscal year and enter another, let’s make sure we’re ready to tackle these new shipping rates. Here’s a closer look.
FedEx 2018 Shipping Rates and Surcharges and Fees
Beginning January 1, 2018, some of the service levels that will be impacted by FedEx’s 4.9% increase include:
- FedEx Express
- FedEx Ground
- FedEx Home Delivery
- FedEx SmartPost
- FedEx Freight
Additionally, FedEx One Rate pricing will increase by about 3.5% on January 1, 2018.
FedEx’s approximate 4.9% shipping increase also comes with an increase in their surcharges and fees. These, too, will go into effect on January 1, 2018. Here’s a sampling of what’s about to change.
2018 Surcharges and Fees
| Service Level | 2017 Rate | 2018 Rate |
| Additional Handling Surcharge | $11 | $12 |
| Address Corrections | $14 | $15 |
| Delivery Area Surcharges | $2.60 – $24 | $2.70 – $26 |
| Oversized Charge | $72.50 | $80 |
| Residential Delivery Charge | $3.85 | $4.15 |
*An extensive detailing on every new surcharge and fee can be found at:
https://www.fedex.com/en-us/shipping/rate-changes/additional-shipping-fees.html
Beginning January 22, 2018, FedEx will impose a new dimensional weight factor of 139 to SmartPost parcels. This means SmartPost pricing will now be similar to FedEx Express and FedEx Ground.
Since SmartPost coordinates with the USPS to make these deliveries happen, this extra surcharge could significantly alter your normal shipping costs.
The following changes will go into effect on January 22, 2018:
- A surcharge will be applied to FedEx Express and FedEx Ground shipments that are billed to a third party.
- Criteria and pricing for packages that require additional handling, are oversized, or are unauthorized, will change.
- SmartPost will apply dimensional weight pricing, and the non-machinable surcharge will change.
- FedEx Freight will implement an over length surcharge of $85 per shipment. This will be applied to shipments that are 8 feet or greater and less than 12 feet.
FedEx has posted all the fine print on their website.
You can also download rates to determine what it will cost to ship with FedEx Express, FedEx Ground, and FedEx Freight.
UPS 2018 Shipping Rates and Surcharges and Fees
Not only will UPS be increasing their shipping rates by about 4.9%, they’ve also revealed their plans for new peak season surcharges next year.
Don’t let this dampen all your holiday cheer too much. Those surcharges will be relatively nominal. For example, 2017’s UPS Next Day Air surcharge is $0.81 while 2018’s UPS Next Day Air surcharge will be $0.84.
The following changes will take effect December 24, 2017:
- UPS Ground, UPS Air, and international services will increase by about 4.9%.
- The dimensional weight divisor for packages less than or equal to one cubic foot will be 139 for all U.S. domestic services subject to daily rates, or Alaska and Hawaii Rates.
Just like their competitor, many of UPS’s surcharges and fees will also increase next year. Along with the 4.9% increase, these will take effect on December 24, 2017. Here’s another sampling of what’s to come.
2018 Surcharges and Fees
| Service Level | 2018 Details |
| Additional Handling Surcharge | The additional handling surcharge will increase $1.15. |
| Address Corrections | The address correction charge will increase $2.50. |
| Delivery Area Surcharges | The delivery area surcharges will increase $0.10 – $0.30. |
| Over Maximum Limits | The over maximum limits charge will increase $350. |
| Residential Delivery Charge | The residential surcharge will increase $0.15 – $4.45. |
*An extensive detailing on every new surcharge and fee can be found at: http://www.rates.ups.com/surcharges.html.
Seven months later, the following changes will take effect on July 8, 2018:
- The large package surcharge for any U.S. Domestic package delivered to a residential address will be $90.
- The additional handling surcharge for any U.S. Domestic package exceeding 70 pounds will be $19.00.
UPS has posted all their 2018 rates and services online.
You can also download PDFs for their 2018 daily and retail rates.
Conclusion: Knowledge Is Power
Awareness is the first step in preparation for these rate hikes. As you start to examine next year’s budget, at least you’ll be able to remain in control of estimated shipping costs.
And don’t forget your normal efforts to streamline the shipping process. You can still preset shipping costs, merge orders whenever possible, and simplify your return process. We’ve posted a handy guide for you on our website.
If you haven’t taken advantage of channel’s shipping templates yet, we can help you with that. Options such as Amazon’s Ship by Region templates and eBay’s Business Policies allow you to better customize per item what shipping options to offer, and how much to charge for each.
If you’re a member of our family of clients, know that we’re only a phone call or e-mail away. We’re here to make 2018 your most streamlined and prosperous year yet.
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