UPS Will Be Increasing Its Shipping Rates Immediately After Busy Holiday Shipping Season
Image: UPS

UPS Will Be Increasing Its Shipping Rates Immediately After Busy Holiday Shipping Season

The company states that its rate hikes will be invested in service expansion and capability enhancements

November 25, 2019

It's almost time for the busiest online shopping days of the year! And with that online shopping comes a lot of package shipping. As more and more shoppers buy their goods online, it puts a strain on the infrastructure those goods use to make it to their final destinations. According to the United Parcel Service (UPS), rates will be increasing in December to fund needed expansions and enhancements.

Rate hikes announced

The UPS 2020 rate increases were just announced and will raise shipping rates by 4.9% for UPS Ground, UPS Air and International services. These rates will take effect on December 29, 2019.

Increases are needed

UPS states that the increases are needed in order to expansion and capability enhancements. UPS has already announced increased service to seven days per week by adding Sunday pickup and delivery and has added more UPS Access points for customers to drop off and pick up packages. UPS says that it currently has more than 9.000 Access Points in the United States and plans to grow that number to 21,000.

FedEx Announced increases earlier this year

Shipping giant UPS is not alone in its rate increases. Earlier this year in September, competitor FedEx announced a 4.9% rate hike for FedEx Ground, FedEx Express, and FedEx Home Delivery. Those price changes go into effect January 6, 2020. FedEx also announced service seven days per week earlier this year.

Package Surcharges

Package surcharges typically increase at a higher rate than general shipping. While this is still true, for the very first time both UPS and FedEx will tack on a new surcharge on ground and air deliveries weighing between 50 pounds and 70 pounds, which usually have irregular dimensions are are costly to handle. There are currently no surcharges for packages in this weight range. If you're shipping a 50 pound package, you can expect to pay about 58% more to ship it when adding the new surcharge to the existing fuel surcharges and increased basic shipping charge. The companies claim the increase is needed to offset the increase of these types of items ordered online.

An end to free shipping?

Fortunately, most consumers will not be affected during the upcoming holiday season. But delivery services have experienced greater demand as more consumers have turned to online shopping, and the dominant players at the moment are UPS and Federal Express. Unfortunately, as the costs of shipping rise, online stores will have to either absorb the increased costs or pass them to their customers in higher prices or an end to free shipping.