SURPRISE! – UPS hikes rates and it will affect your business!

As reported by ICC Logistics Services Inc.:
Tuesday, November 22, 2016

Politicians always talk about an “October Surprise” but now that it’s November, we have a “November Surprise” for all transportation and Logistics executives. Some of these executives will probably say, “I’m not surprised” while others will be totally shocked by what you are about to learn. The biggest “November Surprise” however will be experienced by the tens of thousands of small businesses who may not be aware of this surprise until they feel it in their pocketbooks; and that’s exactly where they will feel it. So, what is this “November Surprise;” you are about to find out.

This past Friday, November 18th, UPS put out, what in effect can be called a second wave of General Rate Increases, in addition to the ones they announced back in early September. These latest increases apply to several different accessorial fees and many of these changes will take a huge bite out of shipper’s pockets. The following is a breakdown of some of the key increases to be implemented by UPS.

Additional Handling Surcharge

  • Effective January 8, 2017, the Additional Handling charge will apply to any package with the longest side exceeding 48 inches instead of 60 inches for the following UPS Services: UPS Air, UPS 3 Day Select, and International Packages.

Dimensional Weight

  • Effective January 8, 2017, UPS will change the dimensional weight calculation for US Domestic Services and UPS Standard from Canada import packages Subject to UPS Daily rates.
  • US Domestic Services packages that are greater than 1728 cubic inches will use a 139 divisor to calculate dimensional weight. US Domestic Services packages less than or equal to 1728 cubic inches will continue to use a 166 divisor to calculate dimensional weight.
  • UPS Standard from Canada import shipments will use a 139 divisor to calculate dimensional weight.

UPS formerly had a 166 dimensional weight divisor in place at the time they announced their General Rate Increase back in early September. However when FedEx announced their General Rate Increase back on September 19, 2016, they reduced their dim weight factor for all Ground and Express packages to 139 to become effective on January 2, 2017. Industry experts have been waiting to see what, if anything, UPS would do and now we see they did in fact make adjustments although slightly different than the move FedEx made.

Fuel Surcharge

  • Effective February 6, 2017, US fuel surcharge will be adjusted weekly.
  • Effective February 6, 2017, US Import fuel surcharge percentage will increase and be assessed independently of US Air and Export Fuel Surcharges.

Prior to this announcement, UPS adjusted their Fuel Surcharges on a monthly basis. They will now fall in line with FedEx who announced in September that they would begin to adjust their fuel surcharges on a weekly basis.

Over Maximum Limits

  • The Over Maximum Limits charge will increase by $40.00 bringing the new charge to $150.00 instead of the current $110.00 charge.
  • The Oversize Pallet Handling Surcharge will also increase $40.00, again from the current $110.00 charge.

The aforementioned increases are the key increases announced by UPS. We encourage all UPS shippers to check out the UPS website to get a complete picture of all of the rates and charges they will be subject to.

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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.