UPS plans 5.9% rate increase on Dec. 21

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Dive Brief:

• UPS will increase its daily shipping rates for ground, air and international services by an average of 5.9% starting Dec. 21, according to the carrier's website.
• The rate bump matches the annual increases UPS has applied in the past three years. The precise impact to individual shippers will vary depending on the characteristics of their packages and the terms of their UPS contract.
• "This helps to support ongoing expansion and capability enhancements as we strive to maintain the high service levels you expect from UPS," the company said. "More detailed rate previews will be available at a later date."

Dive Insight:

The 5.9% increase will arrive at the tail end of the holiday shipping rush, a period in which shippers are expected to be grappling with record-high delivery prices aided by fuel surcharges and peak season fees.

Rival FedEx also revealed plans last month for a 5.9% rate hike slated to take effect Jan. 4, 2027. But how UPS will compare to FedEx when looking at service used, weight and shipping distance is unclear, as UPS has not yet disclosed the precise changes within its average increase.

"Don’t plan around 5.9%," Paul Yaussy, head of parcel contract intelligence at logistics data platform Loop, said in a LinkedIn post. "It’s an average on base rates and won’t reflect your actual cost."

Beyond the rate increase, UPS will be changing the list of ZIP codes in which area surcharges apply and which ZIP codes are aligned to particular shipping zones, or regional classifications that help determine the cost of delivery. The carrier will also increase the minimum billable weight for packages requiring additional handling from 40 pounds to 50 pounds.

Higher delivery prices are coming for small business shippers, too. UPS will increase small business rates for ground, air and international services by 4.5% and apply a domestic and international fuel surcharge of 5% on Dec. 21. Starting on or after that date, the company will apply a per-package surcharge on ground and Ground Saver shipments from certain ZIP codes for some customers as well. Specifics on the surcharge will be available in early November, according to UPS.