Shipping Rate Increases

By December 15, 2011 Shipping Rates

Managing transportation costs is always tricky and the carriers don’t make it any easier with their annual Christmas gift…..rate increases!  UPS announced 6.9% air increases partially offset by a 2% fuel surcharge reduction, and 4.9% average ground increase, offset by 1% fuel surcharge reduction.  Similarly, FedEx announced average rate increases of 5.9% for Express and International services, offset by a 2% reduction in fuel surcharges.  However, for most shippers the impact is much higher than the average increases announced.  UPS customers on “Daily Rates” will realize the following increases:

  • Next day air = 17.5-8.5%
  • Next day air saver = 8.0%
  • 2 Day air AM = 6.5%
  • 2 Day air = 7.5-8.0%
  • 3 Day air = 8.0-10.0%
  • Ground = 7.0-8.0%

2012 FedEx increases announced are as follows:

  • Priority = 4.0-6.0%
  • Priority = 4.0-6.0%
  • Standard Overnight = 6.0-7.0%
  • 2 Day AM = 6.0-7.0%
  • 2 Day = 6.5%
  • Express Saver (3 Day) = 6.5-10.5%
  • International Priority = 4.5-9.0%
  • International Economy = 5.5-7.5%

FedEx is expected to match the UPS Ground increases.  It is important to also note that the ground minimum shipment charge will increase from $5.17 to $5.49, a 6.2% increase.  In addition, other accessorial charges are as much as 10% higher in 2012, such as Delivery Area Surcharges, Residential Surcharges, Declared Value, Dimensional Rates and many other fees.

As always, TAGG works with its fulfillment clients to manages these costs between FedEx and UPS.  We match the right services with the right price to each of our clients…which can also include looking at the USPS as an alternative…although their recent announcements on service and price will be a whole other Blog!