Higher UPS rates will kick in after the holidays

As reported by Internet Retailer:

The average 4.9% increase will take effect Dec. 26 for UPS Ground service in the U.S. and U.S. Air and International delivery.

The bad news: Online retailers and consumers will soon face higher shipping rates from UPS Inc. The good news: The rates won’t kick in until the holidays.

Effective Dec. 26, fees for U.S. Ground delivery, U.S. Air and International packages will increase an average of 4.9%, as will UPS Air Freight rates within and between the U.S., Canada and Puerto Rico, UPS said Friday.

Additional rate changes and charges, including new retail rates and UPS SurePost rates, are on the way and will be announced Nov. 18, UPS says. SurePost is a program in which UPS hands off parcels to the U.S. Postal Service for final delivery to consumers.

“This [rate increase] supports the ongoing investments we continue to make in the speed, scope and coverage of our transportation network,” UPS said Friday in a statement announcing the rate hike. “While we continuously search out opportunities for new efficiencies and implement them within our network, those efforts do not fully offset cost increases.”

UPS also changed the size of packages for which an additional handling charge kicks in on UPS Air and International packages: 48 inches instead of 60 inches. Other 2017 rate changes include a 35-cent increase in the additional handling fee, which currently is $11, according to UPS.

In its most recent earnings report, UPS said U.S. ground shipments increased 2.5% in Q2. Average U.S. daily package volume grew to 14.929 million in the quarter ended June 30, from 14.565 million in Q2 2015. Average U.S. revenue per package was flat in Q2.

This is a common time of year for the shipping carriers to announce pending rate hikes. FedEx Corp. in mid-September 2015 said rates would increase an average of 4.9% starting Jan. 4, 2016. In October 2015, UPS raised the fuel surcharge it adds to the shipping fee online retailers pay, matching a similar fuel surcharge increase competitor FedEx announced earlier that month.

In January, the U.S. Postal Service increased rates on several shipping products used by online retailers, including Flat-Rate Priority boxes. On average, rates increased 9.5%, and it marked the first time in three years the government carrier had raised prices on commercial Priority Mail.

Ken Wood is the founder of LJM Consultants. LJM helps clients negotiate “Best in Class” UPS/FedEx agreements. LJM was recently named the “best parcel auditing company in America” and was also inducted into Inc. Magazine’s Top 500/5000 fastest growing companies in America for 2013. To learn how LJM Consultants can help your company get the parcel contract you deserve, call 631-844-9500 or email kenwood@myLJM.com.