Coming on the heels of the 2020 FedEx shipping increases, the 2020 UPS Rate Increase is here! UPS announced increases in the 2020 shipping rates. In short, the rates for UPS ground, air, and international services will increase an average net 4.9% effective December 29, 2019.
In addition to daily package rates increasing, there are other changes that will increase your shipping charges. The weight threshold for applying the UPS additional handling surcharge will be lowered. The threshold will move from 70 pounds to 50 pounds of actual weight for ground and express services. Value-added services and other charges will also apply to undeliverable packages returned to the shipper. These are in addition to the many accessorial fee increases we covered in our 2020 UPS Rate Increase, Part 1: Accessorial Fee blog post.
2019 vs. 2020 UPS Rate Increases
As you can see, the price increase for the domestic rates is above and below for different services. The two services with the highest price increase are 2nd-day air and 3 day select, with an increase of 6.09% and 5.90%. With the Amazonification of e-commerce and buyer preferences, these are the two services that will see the greatest increase in usage in 2020. Customers want to ship at a lower cost and at their front door sooner.
UPS Ground Price Increase in 2020
Zone 44 is metro Alaska and Hawaii, zone 45 is Puerto Rico and zone 46 is remote Alaska and Hawaii. UPS ground price increase averages 4.87% for all zones and services with 51 to 60-pound packages seeing the greatest increase of 5.35%.
UPS Express Price Increases for 2020
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 2019 the minimum package charge was $7.85. This will increase by 4.84% and become $8.23 in 2020, the same minimum package charge as FedEx ground and home delivery. Therefore, no matter how low your UPS discount is the minimum charge will be $8.23.
How to Mitigate the Yearly Shipping Rate Increase
Most companies accept the 2020 UPS rate increase without any hesitation. They merely transfer the additional logistics cost to the end user’s costs. Shopping cart abandonment has been linked to high shipping costs. Now’s more critical 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 full contract analysis and agreement renegotiation. In addition, 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 2019 UPS Rate and Service Guide through December 29, 2020.
Contact your carrier representative to ask for an exception to the yearly price increases, or contact us at Refund Retriever. In conclusion, we can evaluate your shipping needs and help with a full contract negotiation.