UPS Rate Increase May Be Higher Than You Think!

On October 17, UPS announced a price increase of 5.9% for Ground packages to take effect on January 5, 2009. Last Friday, they provided the details. FedEx will probably match this increase as it has in the past. Rumors are that DHL may not even offer a ground service next year, which is probably why this is one of the highest increases in history.

Upon examination, the price increase for most shippers is significantly more.

Let’s look at an example: the new base rate* (without the fuel surcharge) for a one-pound package shipped to a business in zone 2 is $4.57 compared to $4.20 today. That is an increase of 8.8% which is 50% higher than the announced 5.9%.

If that package is going to a residence, the base rate goes from $6.15 to $6.62. If you add the current fuel surcharge of 8.25%, you will pay $7.17 to ship that package next year.

What are you going to do about it? Please comment and provide your strategies and I will share them in this blog.

*Based on the UPS Daily Rates, which are 30% lower than the Retail Rates. Shippers qualify for the lower Daily rates by having a UPS account number and paying a weekly service charge of $9-$18

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