2019 UPS Rate Increase
Coming on the heels of the 2019 FedEx shipping increases, the 2019 UPS Rate Increase is here! UPS announced increases in the 2019 shipping rates. The rates for UPS ground, air will increase an average net 4.9% effective December 26, 2018.
In addition to daily package rates increasing, there are other changes that will increase your shipping charges. Fuel surcharges will now apply to Additional Handling, Over Maximum Limits, Signature Required and Adult Signature Required accessorial fees. A new processing fee of $2.00 per package will be charged when Package Level Detail (PLD) is not provided to UPS prior to final delivery. These are in addition to the many accessorial fee increases we covered in our 2019 UPS Rate Increase, Part 1: Accessorial Fee blog post.
2019 vs. 2018 UPS Rate Increases
As you can see, the total price increase for the domestic rates we found to be 6.17%. This is greater than the announced 4.9% average. But remember, the 4.9% average claimed by UPS includes international shipping. This is a small percentage of our average client’s shipping mix. The two services with the highest price increase are 2nd-day air and AM, with an increase of 7.22% and 7.46%
UPS ground price increase averages 4.89% for all zones and services with 31 to 40-pound packages seeing the greatest increase of 5.32%.
Zone 44 is metro Alaska and Hawaii, zone 45 is Puerto Rico and zone 46 is remote Alaska and Hawaii.
UPS Minimum Charge Increase
All UPS packages are subject to a minimum charge as we have discussed in a past blog post. No matter how great your discounts may be, every package is subject to this rule and you could be losing valuable discounts. In 2018 the minimum package charge was $7.57. This will increase by 3.70% and become $7.85 in 2019, the same minimum package charge as FedEx ground and home delivery.
How to Mitigate the Yearly Shipping Rate Increase
Most companies accept the 2019 UPS rate increase without any hesitation. They merely transfer the additional logistics cost to the clients’ shipping costs. Shopping cart abandonment has been linked to high shipping costs. It’s more important than ever that your company has a parcel auditing plan in place. Remember to file for any guaranteed service refunds that you are entitled to.
A company can mitigate these costs with a successful contract analysis and agreement renegotiation. Some of our UPS clients will not have this increase impact their shipping costs at all! They negotiated to have rates for transportation, value-added services, and other charges continue to be based on the 2018 UPS Rate and Service Guide through December 28, 2019.
Contact your carrier representative to ask for an exception to the yearly price increases, or contact us at Refund Retriever so we can evaluate your shipping needs and help with a full contract negotiation.