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UPS Announces 2016 Rates and Higher Fuel Surcharge

Following the announcement that FedEx was raising its rates in 2016 comes news that UPS will do the same. And while the rates go into effect in the New Year, this year’s holiday season is the first merchants are experiencing since the two shipping carriers instituted new dim-weight rates for 2015.

Effective December 28, 2015, UPS Ground rates and accessorial charges will increase by an average net 4.9 percent. UPS Air and International services and accessorials, including UPS Air Freight rates within and between the U.S., Canada and Puerto Rico, will increase an average net 5.2 percent. UPS Freight rates will increase an average net of 4.9 percent, effective October 26, 2015.

What has the ire of many a shipper is news that UPS – and FedEx – are raising fuel surcharges next month, despite the lower cost of fuel.

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Here’s what UPS had to say: “Effective November 2, 2015, the surcharge will increase for Over Maximum Packages and the tables for Ground, Air and International fuel surcharges will be updated. Effective January 4, 2016, there will be a charge for UPS’s Third-Party Billing Service.

“The rate and surcharge changes are to address the impact of increased costs, changing demand for select UPS products and other market factors.”

Shipware CEO Rob Martinez crunched the numbers and found, the Ground increase for most online sellers is more than the 4.9% “average” that was announced. “If you ship lightweight Ground packages, increases were actually 5.8% for 1-5 pound packages, and 5.5% for packages weighing 6-10 pounds. Deferred air shipments (2-3 day service) increased 7.5-8.5%.”

He also noted that some fees will see double-digit increases, including Additional Handling Service, Ground Weekly Pickup Fee, and Indirect Signature

“FedEx and UPS packages that exceed authorized limits will incur a $110 fee, up from $57.50 in 2015,” Martinez said. “For deferred Ground shippers, SmartPost DAS and non-machinable fees will more than double. And obviously, higher fuel surcharges will adversely impact shippers’ costs.”

Martinez said based on Shipware’s analysis, his clients will see an average 17% increase in dimensional charges during the holidays due to the new dim-weight pricing for Ground products.

You can see more information on the rates page of the UPS website, and here’s our story on the FedEx announcement.

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Ina Steiner

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. Send news tips to ina@ecommercebytes.com.


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