2020 FedEx and UPS Rates Explained

December 10, 2019 at 1:29 PMLeah Palnik
2020 FedEx and UPS Rate Increases Explained

UPS and FedEx rates are slated to go up in 2020 by an average of 4.9%. The changes will go in effect for UPS on December 29, while the FedEx rates go into place on January 6.

If you’re planning to budget for your costs to go up 4.9% in the next year, you better think twice. The announced average doesn’t paint a complete picture. The rates for some packages will be increasing less than 4.9%, but that means that the cost to ship other packages is increasing far more. What you’re shipping, where you’re shipping it to, and what service you’re using will ultimately determine how much you should budget for your shipping costs in the new year.

Here are the released rates for 2020:

FedEx and UPS surcharges
The rates, however, are only one part of the equation. You also have to take into account the additional fees that UPS and FedEx tack on. It’s more important than ever to be mindful of what could qualify your packages for these surcharges. Not only do the costs increase year over year, but the carriers also make adjustments to how the charges are defined – making it more likely that your packages will be hit with them.

A prime example of this is the change both FedEx and UPS made to their Additional Handling fee for 2020. They’ve lowered the weight threshold to 50 pounds from 70 pounds, which means your costs could go up significantly if you ship packages within that window.

Here are all of the announced surcharge changes:

Industry trends
Online shopping has had a profound effect on the parcel industry and the way that FedEx and UPS operate. The carriers are moving more residential deliveries and an increased amount of larger packages, as consumers have become accustomed to being able to order almost anything online and receiving it in 2 days or less.

The changes FedEx and UPS have instituted in recent years and are making in 2020 are a direct response to these industry trends. In the past several years, they’ve broadened the use of dimensional weight pricing, added new peak surcharges, and drastically increased the surcharges for larger packages.

Understanding the 2020 rate increases
We know how daunting it is to analyze the 2020 FedEx and UPS rates, so we’ve done the hard work for you. In our free white paper, we break down the new rate charts and simplify some of the complicated changes. It’s the best way to find out what will cost you the most in the year ahead. Looking for ways to offset the rate increases? We can also help with that. Contact us to find out if you qualify for one of our discount shipping programs.

Download the free white paper: Your Guide to the 2020 FedEx and UPS Rate Increases

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