UPS Releases 2019 Rate Increases

December 6, 2018


“UPS continues to make investments in capacity, technology and reach of our transportation network in order to support our customers’ growth, visibility, and service needs. Rate increases support ongoing expansion and capabilities enhancements while ensuring UPS is fairly compensated for the value and high service levels provided.”  (Dec. 5 Press Release – UPS Announces U.S. Rate Changes)

So says Big Brown and oh, by the way, never mind the shipper who has now been given less than 30 days to plan and budget. Well done Brown.

Yes, at long last, UPS has announced their 2019 rate increases. Effective December 26, rates will go into effect and will give shippers little time to fully digest the financial impact. Even worse, it appears the full rate guide will not be available for analysis until December 26th, although it seems most if not all of the information can be found through multiple links on their website.

A look at the announced rate increases finds that UPS will meet FedEx’s average rate increase of 4.9% for UPS Ground, UPS Air and International services. Since 2010, UPS and FedEx have announced the same average rate increase of 4.9%.

However, the true impact will be felt in the accessorial fees. Among the announced increases are:

  • Additional Handling will increase $4.00 for any U.S. domestic package exceeding 70 pounds in actual weight. For all other packages, additional handling will increase $2.25. This somewhat fuzzy fee is assessed on any package that “requires special handling, as determined by UPS in its sole discretion.” Among the items assessed are packaging, weight length and width.
  • UPS continues to emphasize that it does not want large or Overmax packages in its small package network and as a result, it increases this fee on an ongoing basis with the most recent increase being in June. For 2019, the Large Package Surcharge for U.S. Domestic commercial packages will increase $15.00 while the Large Package Surcharge for U.S. Domestic residential packages will increase $25.00. Meanwhile, Overmax and Oversize fees will increase significantly. The Over Maximum Limits charge will increase $200.00 and the Oversize Pallet Handling Surcharge will increase $200.00.
  • Perhaps one of the most overpriced fees, address corrections, is also going up. In 2019, it will increase $0.50 and the per shipment maximum will increase $3.50. Lesson to shippers, make sure to properly address each package – the UPS way. This fee alone, for Ground deliveries, has increased 64% since 2010 from $10.00 to $16.40.
  • The fee applied to shipments billed to a Third Party will increase to 4.5% of total charges.

 

*Large Package Surcharge was split between commercial and residential in 2018.

In addition, Surepost, the hybrid package service in which the USPS performs the last mile delivery on behalf of UPS, will see significant increases averaging around 9.0% for packages one pound or greater and about 9.34% for packages less than one pound. This is not surprising with the USPS announcing their own hefty rate increase in October. Retailers will be among the most impacted by this increase as many utilize this option in order to compete on ‘free shipping’ while maintaining tight margins. In addition, Surepost DAS and Surepost DAS Extended fees will each increase $0.45, a year-over-year increase of 32.14% and 23.68% respectively. Will we see modifications of/or perhaps the end of ‘free shipping’ in 2019?

“These rate increases are massive and are going to negatively impact shippers of all sizes,” said John Haber, Founder and CEO of Spend Management Experts.

UPS has presented a lot to digest in a short time period, 20 days to be exact and shippers need to prepare for not only these announced increases but potentially additional announcements in 2019. We fully expect UPS to continue a trend started this year in announcing periodic increases throughout the year. For more information on how we can be of assistance, please contact us through our website or call us at 404-902-5390.

Share this article:

Blog Posts

  • Categories

UPS Releases 2019 Rate Increases

December 6, 2018


“UPS continues to make investments in capacity, technology and reach of our transportation network in order to support our customers’ growth, visibility, and service needs. Rate increases support ongoing expansion and capabilities enhancements while ensuring UPS is fairly compensated for the value and high service levels provided.”  (Dec. 5 Press Release – UPS Announces U.S. Rate Changes) So says Big Brown and oh, by the way, never mind the shipper who has now been given less than 30 days to plan and budget. Well done Brown. Yes, at long last, UPS has announced their 2019 rate increases. Effective December 26, rates will go into effect and will give shippers little time to fully digest the financial impact. Even worse, it appears the full rate guide will not be available for analysis until December 26th, although it seems most if not all of the information can be found through multiple links on their website. A look at the announced rate increases finds that UPS will meet FedEx’s average rate increase of 4.9% for UPS Ground, UPS Air and International services. Since 2010, UPS and FedEx have announced the same average rate increase of 4.9%. However, the true impact will be felt in the accessorial fees. Among the announced increases are:

  • Additional Handling will increase $4.00 for any U.S. domestic package exceeding 70 pounds in actual weight. For all other packages, additional handling will increase $2.25. This somewhat fuzzy fee is assessed on any package that “requires special handling, as determined by UPS in its sole discretion.” Among the items assessed are packaging, weight length and width.
  • UPS continues to emphasize that it does not want large or Overmax packages in its small package network and as a result, it increases this fee on an ongoing basis with the most recent increase being in June. For 2019, the Large Package Surcharge for U.S. Domestic commercial packages will increase $15.00 while the Large Package Surcharge for U.S. Domestic residential packages will increase $25.00. Meanwhile, Overmax and Oversize fees will increase significantly. The Over Maximum Limits charge will increase $200.00 and the Oversize Pallet Handling Surcharge will increase $200.00.
  • Perhaps one of the most overpriced fees, address corrections, is also going up. In 2019, it will increase $0.50 and the per shipment maximum will increase $3.50. Lesson to shippers, make sure to properly address each package – the UPS way. This fee alone, for Ground deliveries, has increased 64% since 2010 from $10.00 to $16.40.
  • The fee applied to shipments billed to a Third Party will increase to 4.5% of total charges.
 
*Large Package Surcharge was split between commercial and residential in 2018. In addition, Surepost, the hybrid package service in which the USPS performs the last mile delivery on behalf of UPS, will see significant increases averaging around 9.0% for packages one pound or greater and about 9.34% for packages less than one pound. This is not surprising with the USPS announcing their own hefty rate increase in October. Retailers will be among the most impacted by this increase as many utilize this option in order to compete on ‘free shipping’ while maintaining tight margins. In addition, Surepost DAS and Surepost DAS Extended fees will each increase $0.45, a year-over-year increase of 32.14% and 23.68% respectively. Will we see modifications of/or perhaps the end of ‘free shipping’ in 2019? “These rate increases are massive and are going to negatively impact shippers of all sizes,” said John Haber, Founder and CEO of Spend Management Experts. UPS has presented a lot to digest in a short time period, 20 days to be exact and shippers need to prepare for not only these announced increases but potentially additional announcements in 2019. We fully expect UPS to continue a trend started this year in announcing periodic increases throughout the year. For more information on how we can be of assistance, please contact us through our website or call us at 404-902-5390.

Share this article:

Blog Posts

  • Categories