FedEx & UPS Rate Increase for 20226 min read

Introduction to the Rate Increase by FedEx and UPS

Year on year, major shipping carriers such as FedEx and UPS increase the rates for their services, raking up your shopping bills. 

There have been similar hikes across both carriers on multiple services for the fifth year in a row.

FedEx has announced its General Rate Increase (GRI), which will be effective from January 3, 2022, with an average increase of 5.9% on its Express, Freight, Ground services, etc. 

On the other hand, UPS will increase the rates of its services by an average of 5.9% effective from December 26th, 2021.

However, the hikes have been up to a whopping 11% in certain cases. 

Being aware of this spike by shipping carriers can help you plan out your shipping strategy in advance and put you ahead in your last-mile game.

That might seem a challenge, but worry not! To save your time, we’ve charted out the data for you!

Make sure to read till the end for ways to save on shipping in 2022 and reduce the impact of FedEx & UPS’ General Rate Increase on your business.

Why do FedEx and UPS increase their rates YoY?

This is a question i.e largely on the minds of every eCommerce retailer out there. 

FedEx and UPS are behemoths who are making a revenue of more than $15.B each quarter. But why do they still tend to increase the rate of their services every year?

In the uncertain logistics space when there are ever-increasing costs in the form of inflation (fuel and labor costs), shipping carriers have almost no choice but to raise their service rates to cover these costs and maintain profitability. 

Not to forget, there are also frequent investments being done in technology innovations such as fleet maintenance and other areas. FedEx and UPS believe that such investments are necessary to meet the increasing market demand.

While large businesses escape unscathed, such frequent rate increases can put SMBs at pressure to cover their costs, amongst other issues such catering to customer needs.  

We’ll take a closer look at the impact of these rate increases on D2C eCommerce business, B2B, and 3PL parcel shippers.

But before that let’s talk about some of the key highlights of this year’s rate increases.

Key Highlights of the FedEx and UPS Rate Increase for 2022

  • Large packages will cost you big – There has been an increase of 4% – 14% in oversize charges by FedEx and an 8% – 16.7% increase in large packages by UPS (nearly tripled).
  • UPS will now apply an Additional Handling Fee of 5% – 13% based on the zone to packages measuring greater than 105 inches in length plus girth combined.
  • The ground minimum rate for shipments has been increased from $8.76 to $9.36, an increase of 6.85% by both carriers.
  • Both carriers have increased their rates uniformly zone-wise and have changed more delivery locations to remote areas in order to levy additional surcharges.
  • UPS has renamed their Peak Surcharges as Peak/Demand Surcharges.
  • Both carriers made changes to Oversize Charges and Additional Handling Surcharges according to 7 different delivery zones throughout the country. 

What the Increase in Rates by FedEx & UPS Mean Business