Rate Increases

July 22, 2019 Sunnyvale / CA / USA - UPS

UPS Announces 2020 General Rate Increases (GRI)

By Shipware | News, Rate Increases, UPS

Effective December 29, 2019, UPS Ground, UPS Air and International services rates will increase by an average of 4.9%. Keep in mind that there is often a discrepancy between the announced increase and the effect the increase has on individual shippers.

Our team at Shipware will perform a detailed analysis of the announced increases over the next week, but in the interim, here are some areas which will likely provide the most impact:

1. Longer zone UPS Air services will take larger increases, while all ground zones will take similar increases. Shippers are more likely to utilize longer zones in the express networks, as the ground networks become more efficient in accomodating 1-2 day transit times in the lower zones, so it is likely that heavy UPS air shippers will take larger increases. Following is a comparison of Air to Ground:

Screen Shot 2019-11-19 at 3.35.32 PM

2. Two and Three day shipping have larger increases than other services. This will negatively affect shippers with day-definite (but not overnight) shipping needs. Increases are consistent across weights for air services, but generally increase by weight for ground services.

Screen Shot 2019-11-19 at 3.37.18 PM

Full weight/zone breakdown of ground services increase:

Screen Shot 2019-11-19 at 3.38.24 PM

3. The ground minimum package charge (zone 2, 1 pound list rate) has increase by 4.84% to $8.23, which mirrors FedEx. Following a full breakdown of minimum charge increases by service:

Screen Shot 2019-11-19

4. SurePost increases are much lower from 1-9lbs (2.2%) than at 10+lbs. (5.3%). This will allow the UPS SurePost list rates to better compete with FedEx SmartPost list rates, although the SurePost rates remain higher by approximately 3-4% from 1-9lbs.

5. UPS has followed FedEx in placing a new emphasis on “Extended” Delivery Area Surcharges (DAS). Zip codes designated as extended delivery areas will incur a much larger increase than their non-extended DAS counterparts. Refer to the full table below for the full breakdown of the increases.

  • Standard DAS increases range from 1.2% – 5.3%
  • Extended DAS increases range from 11.3% – 23.2%
  • Note that DAS/Extended DAS zip codes have changed. Refer to the changes here:

6. UPS has added new accessorial charges for 2020: Rebill fee, Prohibited Item Fee, Item 86 Fee:

  • A Rebill fee ($17) will be assessed for each request to change the billing account for a shipment.
  • A Prohibited Item fee ($150) will apply to packages containing prohibited articles or restricted articles not in compliance with all UPS policies and procedures, and applicable laws and regulations if found in the UPS system.
  • A processing fee ($10) will apply to each request to file a single entry under Entry Type 86 for a shipment that normally qualifies for U.S. customs clearance under a consolidated manifest.

This table shows accessorial increases for UPS’s most commonly assessed charges:

Screen Shot 2019-11-19 at 3.50.18 PM

Also, effective December 29, 2019, new surcharge ratings will occur:

  • Value-added services and other charges will apply to undeliverable packages returned to the shipper.
  • UPS reserves the right to assess a late payment fee in an amount set forth in the UPS Tariff/Terms and Conditions of Service if an invoice is not paid in full by the invoice due date.
  • The weight threshold for applying an Additional Handling surcharge will be lowered from 70 pounds to 50 pounds actual weight for UPS Ground and UPS Air services.

How will this affect individual shippers? The general rate increase will affect some shippers more than others. If you’re a shipper that routinely uses two or three day, long-zone express, or ships to remote areas, it is likely that you will be subject to an increase much larger than the stated 4.9%.

As is the case with each annual rate increase, it is vital to understand how all changes combined will impact your individual characteristics and, ultimately, your overall shipping costs. However, understanding the financial impact to your organization is not a simple or straightforward analysis. If you would like an in-depth understanding of how UPS’s 2020 increase will affect you, Shipware will perform a complimentary and customized analysis for your organization. Email to learn more.


Matt Bohn,
Senior Consultant, Professional Services
Shipware, LLC

Matt Bohn is a Senior Consultant, Professional Services at Shipware, LLC, where he works to optimize carrier contracts for high-volume shippers. Matt has nine years of previous experience as a Revenue Management Advisor at FedEx, where he analyzed and developed contracts for some of FedEx’s largest eCommerce shippers. Matt has transitioned to helping similar shippers dramatically reduce their shipping costs. He can be reachesd at


UPS Announces 2019 Rate Increases

By Rebecca Lannon | News, Rate Increases, UPS

Shipware Preliminary Analysis: What You Need to Know

United Parcel Service (NYSE: UPS), will increase shipping rates effective December 26th, 2019 by an average of 4.9% for UPS Ground, UPS Air & International services while UPS Air Freight rates will increase by an average of 4.9% on December 27th, 2018. The change will impact the following:

  • UPS Daily Package Rates including UPS Ground, UPS Air, and UPS International services
  • UPS Alaska and Hawaii Daily Package Rates
  • UPS Retail Package Rates including UPS Ground, UPS Air, and UPS International services 
  • UPS Hundredweight Service Package Rates 
  • UPS SurePost Rates
  • UPS Air Freight Rates
  • U.S. Origin UPS Express Freight Premium Direct Rates

In addition, there will be changes to UPS surcharges and minimums also effective on December 26th.  Notable of those changes for 2019 include the following:

ups 2019 rate increase_shipware

Here are some highlights from the announcement, showing the changes to some of the more common surcharges, along with the percentage increase.  In recent years, the largest increases continued to be reserved for those surcharges related to package size and dimensions, and this year we also see US increasing the Third Party Billing Fee by 80%!

Take a closer look at Additional Handling, Large Package Surcharge and Over Maximum Limits. UPS increased these accessorials during the 2018 General Rate Increase in December 2017 and then again in July 2018, and all 3 are going up again. Additional Handling Weight has increased over 91% in 12 months! 

The comparison below of 2018 rates to 2019 rates shows the actual impact by service and weight break. In many cases, the actual increase is over 5% – even as high as 9.34%!

An analysis by zone reveals that the increases deviate from the 4.9% mark quite a bit. SurePost<1lb is taking the biggest hit with zone 2 increase of 9.87%.

This year, UPS is giving its customers only 3 weeks’ notice of the 2019 increase whereas many contracts state that there must be a period of 30 days’ notice. Some of the most notable changes in 2019 will be the following: 

  • Fuel surcharges will now apply to more surcharges than ever before.  Included among those are Additional Handling, Over Maximum Limits, Signature and Adult Signature Required.
  • Fuel surcharges are scheduled to increase, but details won’t be available until 12/27/2018.
  • UPS will charge a processing fee when Package Level Detail (PLD) is not provided to them prior to delivery.

Both UPS and FedEx continue to create a more complex pricing environment year over year. Many shippers understand that there is usually very little correlation between the carriers’ announced average increase and the actual increase by service level, zone and weight.  The impact to their parcel budget can vary significantly from the announced average increase depending on their shipper profile. A more thorough analysis by Shipware’s team of consultants will be forthcoming. 

These increases will significantly impact each shipper; however, the increase in overall cost will vary per each shipper’s unique shipping characteristics. Please contact us if you would like a custom analysis to understand the exact impact these changes will have on your business.


USPS 2019 Commercial Plus Pricing & Its Impact on Shippers – Part 1

By Gordon | News, Rate Increases, Shipping Knowledge

The USPS just proposed a major multi-dimensional price and structure change with a planned January 27, 2019 implementation.  There are a lot of moving parts, including a 10% increase to mail a 1 oz letter with a 29% reduction on the 2ndoz.  Business mailers will see a nice increase in the discount to use a Postage Meter with savings per letter increasing from 3 to 5 cents.

The focus of this article is understanding how the proposed changes in the USPS Commercial Plus Pricing will impact shippers.  Part 2 will go into more depth and include some actual case studies to see how the USPS will fare in 2019 with their continuing goal of earning more business from UPS and FedEx shippers.

Highlights of the Proposed 2019 USPS Shipping Rate Changes

  • Priority Mail (PM) Commercial Plus Pricing” (CPP) will be the same as “Commercial Base” (CBP).
  • Reported 5.9% increase for PM is understated, with CPP users taking a bigger hit.
  • First Class Package Services (FCPS) switching to zone-based pricing and a reported 11.9% increase.
  • Dimensional Divisor for Priority Mail (PM) is being reduced to 166 from 194 and will now include ALL zones. These Dim Policies will also apply to Priority Mail Express (PME) and Parcel Select (PS)
  • “Balloon” pricing is removed in all categories that include the new Dimensional rating rules.

First Class Package Services (FCPS) – Commercial

  • Eliminated “no zone” pricing making YoY comparisons more difficult. See Chart 1
  • Commercial + 11.9% (Note: Retail + 13.3%)
  • Inner zone (Zones L-4 = less than 600 miles) +6.7%.
  • Outer Zones 5-8 up a whopping +15%.
  • Shippers with high zone 8 profile, very common with only a single Distribution Center (DC) on one of the coasts, will see a 21% increase. This will entice those to consider opening a second DC or use 3rd party fulfillment options.  For example, Amazon should see an increase in subscriptions to their FBA programs.
  • Over a lb. To give you a better perspective on how massive this increase is, using Zone 5 rates as the median and a cumulative 5 yr. comparison, this year’s change raises the 5-yr. average to 31% from 19% (2014-2018). See Chart 2

Chart 1:

USPS Commercial Plus Pricing, USPS 2019 increase

Chart 2:

First Class Package Services increase, USPS Commercial Plus Pricing changes 2019

Priority Mail (PM)

  • Priority Mail (PM) “Commercial Plus Pricing” (CPP) will be the same as “Commercial Base” (CBP).
    • Most low volume shippers today are getting CPP via one of the Reseller Programs.
    • The USPS provided guidance prior to the 2016 rate change that CPP pricing would go away in 2017. This never happened.
    • In 2018, the USPS indicated their intention to make CBP pricing relevant again.
    • The USPS will reap a quick 3% revenue jump by eliminating the current delta between the rate tables.
  • Reported 5.9% increase for PM is understated, with CPP users taking a bigger hit.
    • For example, let’s compare average increases in the highly used lanes (≤ 2 lbs, zones L-8).
      • CBP +4.6% (Chart 3)
      • CPP +8.2% (Chart 4)
    • Dim Divisor for affected packages will be reduced from 194 to 166 and will now apply to all zones; balloon pricing for zones L-4 is eliminated.
      • Negotiated Service Agreements (NSA) to allow for custom dimensional weight divisor, dimensional threshold, non-rectangular dimensional adjustment factor, or limit the applicable weights and zones.
      • 1728 cubic threshold is maintained. (no Dim policy in effect for packages under 1 cubic foot)
    • Flat Rate Products
      • Flat Rate Envelopes and Sm Pkgs.
        • CBP + 6% (Chart 5)
        • CPP +9% (Chart 6)
      • Flat Rate Med & Lg Pkg
        • CBP – Minor price decrease. (Chart 5)
        • CPP +3% (Chart 6)
      • Regional Flat Rate +4%.
      • Cubic pricing +6.6%. (Chart 7)

Chart 3:

USPS 2019 rate changes impact on commercial shippers

Chart 4:

USPS Priority Mail Commercial Plus Pricing changes 2019

Chart 5:

Priority Mail Commercial Base Pricing delta

Chart 6:

Priority Mail Commercial Plus Pricing delta

Chart 7:

USPS Commercial Plus Pricing cubic rate increase

Parcel Select (PS)

With the huge growth of e-Commerce “free” shipping, e-tailors favor economy shipping options.  A majority of these are inducted via Parcel Select, although many will not recognize the name.  They are better known by their popular brand names like UPS SurePost, UPS Mail Innovations, FedEx SmartPost, Pitney Bowes Newgistics, OSM Worldwide and DHL SmartMail. Collectively known as “Consolidators”, these companies perform and enjoy “workshare incentives” from the Postal Service for: collection, sortation, transportation, and deep induction within the USPS network for final mile delivery.

  • Important to realize that Consolidators use these programs differently, with some offering as many as 3 service levels. It is possible to get 2-3-day transit times and compete with FCPS and PM.
  • New (PM) Dimensional rating policies will apply (see PM Dim policy above).
  • PS Destination Entry (DDU) +9.9% and PS Sectional Center Facility (SCF) +9.6%.
    • 5 Yr. cumulative average increase down slightly to 30% from 31% (2014-2018). (Chart 8)
  • Parcel Select Lightweight (PSL)
    • Ounce-based – no zones, based upon induction point.
    • + 11.5% for DDU induction, and +10.8% for SCF. (Chart 9)
    • New Dim policies do not apply to PSL
  • Parcel Select Ground
    • Single Piece, 1-70 lbs., zone based.
    • Often used for OMRD – Haz Mat to avoid Air transport.
    • Was closely aligned with PM Base, now is about $.20 less on average per lane.

Chart 8:

Parcel Select multi-year comparison

Chart 9:

Parcel Select / Commercial Parcels

USPS International Shipping Rate Changes

  • Retail – no changes to outbound pricing.
    • Flats limited to 15.999 ounces from previous 64 ounce limit. Earlier removed ability to ship products in this category.
  • Commercial (note: Base and CPP are the same).
    • Expedited Global Express Guaranteed (GXG) +4.9%
    • Priority Mail Express International (PMEI) +3.9%
    • Priority Mail International (PMI) +3.9%
    • International Priority Airmail (IPA), International Surface Airlift (ISAL) including associated M-Bags +19.9%
    • Airmail M-Bags +5.0%
    • First Class Package International Service (FCPIS) +3.9%

This is a major increase, no way to sugarcoat it. Shippers will be well advised to analyze their shipping distribution profile to gauge how these changes will impact their costs.  It will be a good time to look for savings by examining routing logic, review carrier contracts, and network with industry peers.

Part 2 of this topic will include in-depth studies to estimate how USPS will compare to discounted FedEx and UPS rates that larger shippers command in the marketplace.  I believe the USPS has done their homework and carefully raised rates where they continue to dominate with little competition.  For those who control pricing in their own business, you know how challenging it can be to raise pricing.  This is not lost on the USPS, they know there is a much stronger elasticity in the “Competitive” (Shipping) arena than in the Market Dominant (Mailing) side, which means that there is a known significant drop % in volume for every % increase in price.

USPS Commercial Plus Pricing

Gordon Glazer, CMDSM, CMDSS, MDP, MDC is a Senior Consultant, USPS Specialist at Shipware LLC, an innovative parcel audit and consulting firm that helps volume parcel shippers reduce shipping costs by 10%-30%. Gordon is a postal industry veteran with 32 years of experience and is a sought-after speaker and industry thought leader. He welcomes your questions and comments, and can be reached at 858-879-2020 Ext 108 or


2018 FedEx & UPS Peak Season Surcharges

By Shipware | FedEx, News, Rate Increases, UPS

The FedEx/UPS near-duopoly has allowed the two large carriers to control marketplace pricing for years, echoing each other’s rate hikes to the detriment of parcel shippers, small and large. It’s no surprise then, on the heels of UPS’ latest intra-year pricing changes, that FedEx has recently announced its own set of rate increases, effective September 3rd.

The Additional Handling surcharge, for packages weighing greater than 70lbs, will increase from $12 to $20 for domestic express, international express, and domestic and international ground. Similarly, July 8thsaw UPS raise its Additional Handling surcharge on packages weighing more than 70lbs from $12 to $19 and increased its Large Package Surcharge from $80 to $90.

FedEx’s Unauthorized Package Charge will increase 125%, from $300 to $675, keeping them in line with UPS’ increased Over Maximum Limits charge which jumped from $500 to $650 on June 4th.

In addition, shippers will also see incremental, “peak” seasonal increases by FedEx to some of these surcharges to domestic express and domestic and international ground shipments between November 19thand December 24th. Compare these to the peak increases that UPS will institute between November 18thand December 22ndto all service levels and all domestic destinations.

  • FedEx Additional Handling:  $3.20 / UPS Additional Handling: $3.15
  • FedEx Ground Unauthorized Package Surcharge:  $150 per package / UPS Over Maximum Limits: $165 per package
  • FedEx Oversize Charge:  $27.50 / UPS Large Package: $26.20

Shippers saw changes to these same charges earlier this year, in terms of the surcharge amount as well as to how they’re calculated.

These rate increase announcements signal the continuation of a trend that began last year. The carriers don’t want these packages in their parcel network, but in their freight/LTL network. If shippers don’t adjust accordingly, they will find themselves paying a premium.  Expect this trend to continue.

The one area FedEx and UPS differ, in terms of these latest rate increases, is the Peak Residential Surcharge. Surprising many, FedEx will not implement this surcharge for the second straight year, while UPS will not only apply the Peak Residential Surcharge once again, but will raise the rates established last year.

ups and fedex peak season pricing

This could give FedEx a competitive advantage with shippers looking to shift some volume prior to peak.