CPC Consultants monitors UPS and FedEx shipping rates, carrier capacity, and market changes to help businesses identify parcel shipping savings. Learn how our parcel consulting services can reduce UPS and FedEx costs and improve your shipping strategy.
It’s that time of year again and its de ja vu once again – Both UPS and FedEx have announced that they will increase their rates 5.9% in 2025. UPS has decided to implement the rate increase earlier – December 23, 2024 to take advantage of the uptick in shipping, where as FedEx has decided to implement their increases January 6, 2025.
This duopoly has been increasing rates at the same rate for over 15 years. They do not follow other freight companies as they set the prices whereas all other modes ebb and flow with demand. The backdrop to transportation in 2024 is that there was a transportation recession, and rates fell significantly. So, as Benjamin Franklin so famously quoted, “In this world, nothing is certain except death and taxes.” We can now tweak this quote and add, “In this world, nothing is certain except death, taxes AND PARCEL RATE INCREASES EVERY YEAR at 5.9%”.
The 5.9% rate hike at FedEx and UPS is only an average. The actual increases shippers will encounter vary depending on each shipper’s shipping characteristics. Some highlights of this rate hike are:
1. Both FedEx and UPS range from 4.8% to 7.5% by service level — Lower than previous year 5.5%-7.5% % in 2024
2. Two Day AM is the service level with the largest increase (7.30% FedEx; 6.83% UPS)
3. Zone 5 is the zone with the largest increase from both (6.7% FedEx; 6.84% UPS)
4. FedEx rates are much higher than UPS for 3-day service: 15.3%
5. UPS rates are marginally higher for 1-day service categories (1DA, 1DS, 1DP ): 0.8%
6. UPS rates are significantly less expensive for 2 Day, 3 Day and Ground: 5.9%
Shippers should also consider any surcharges that apply to their shipments, which aren’t factored into the carriers’ base rates but will also see increases for 2025 and implemented earlier in 2024. Added fees that FedEx and UPS levy include charges for large and oversized goods, packages that require additional handling, deliveries to remote locations, and fuel surcharges.
Despite the rate hikes from FedEx and UPS, what we can learn today is shippers are in a prime position to negotiate better contract terms as delivery demand remains soft. Or simply employ CPC CONSULTANTS and avoid this entire situation by allowing CPC CONSULTANTS to orchestrate savings with deeper discounts on rates and accessorial charges.
The key for shippers in negotiations is to make sure they understand their biggest strengths as a customer that can lead to reduced charges and there is no better way than to allow CPC CONSULTANTS through their FREE ASSESSMENT to take a look at your transportation costs via their “CPC EVALUATOR” software and at NO COST show your specific areas of strength based on our library of rates and utilizing our freight optimizer (CPC Evaluator).
Companies wishing to employ CPC CONSUTANTS and jump on this FREE opportunity can contact us for further information and directions. Let CPC Consultants work on your behalf to rid your yearly FedEx and UPS “inevitable” shipping rates cost increase challenge.