UPS Is About to Get More Expensive

As reported by Fortune:

So is FedEx

Better not send any belated Christmas gifts this year.

United Parcel Service announced Thursday it would raise the rates for U.S. ground and air shipping services by an average 4.9% starting Dec. 26.
International shipping rates also rose 4.9%.

For consumers and businesses shipping items over 150 pounds in the U.S., Canada, and Puerto Rico however, the rate hike will come into place much earlier, on Sept. 9.

The price of shipping packages has skyrocketed over the past decade, with the cost of ground shipping for both FedEx and UPS having grown 79.2%. Air shipping rates have grown 95.5% over the past decade, according to Lojistic, a transportation software provider.

UPS has raised rates an average of 3% to 5% annually. Average revenue per package delivered in the U.S. has stalled in recent years, pressured by free shipping options and heavy competition.

FedEx is also expected also announce a shipping rate hike in the neighborhood of 5% later this month, according to a note from Oppenheimer analyst, Scott Schneeberger.

Don’t worry too much about big customers such as Amazon however—they usually manage to negotiate around those rate hikes. The increases usually hit small businesses and individuals the hardest.

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.