Coming on the heels of the 2023 FedEx shipping increases, the 2023 UPS Rate Increase is here! UPS announced increases in the 2023 shipping rates. UPS ground, air, and international rates will increase an average net of 6.9% effective December 27, 2022.
In addition to increasing daily package rates, other changes will increase your shipping charges. The UPS late payment fee will increase. Scheduled UPS pickup options will no longer vary by weekly billing total; variation in cost will now base on total pickup days. These are in addition to the many accessorial fee increases we covered in our 2023 UPS Rate Increase, Part 1: Accessorial Fee blog post.
2022 vs. 2023 UPS Rate Increases
As you can see, the total price increase for the domestic rates we found to be 7.45%. This is greater than the announced 6.9% average. But remember, the 6.9% 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 3 day select, with a rise of 7.67% and 9.95%
UPS ground price increase averages 6.36% for all zones. All weight range increases are close to each other for the first time in a long time.
Zone 44 is metro Alaska and Hawaii, zone 45 is Puerto Rico, and zone 46 is remote Alaska and Hawaii. Zones six to eight will experience the most significant increase of 8.04%
2023 UPS International Service Rate Increase
Other 2023 UPS Rate Increase Changes
- Scheduled Pickups Options will no longer differ by weekly billing totals.
- Late Payment Fees will rise from 6% to 8%.
- Peak/Demand Surcharges will be referred to as Demand Surcharges.
- The list of ZIP codes aligned to specific zones will change.
UPS Minimum Charge Increase
As discussed in a past blog post, all UPS packages are subject to a minimum charge. No matter how great your discounts may be, every package is subject to this rule. Therefore, you could be losing valuable discounts. In 2022 the minimum package charge was $9.36. The UPS ground minimum charge will increase by 7.9% and become $10.10 in 2023, the same minimum package charge as FedEx ground and home delivery.
How to Mitigate the Yearly Shipping Rate Increase
Most companies accept the 2023 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. 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! They negotiated to have rates for transportation, value-added services, and other charges continue to be based on the 2020 UPS Rate and Service Guide through December 28, 2022.
Contact your carrier representative to ask for an exception to the yearly price increases. Now that you know what the GRI is, you next need to look at your existing UPS contract, because your contracted discounts are just one part of the overall equation. We’ve got your back if you need help interpreting your carrier contract! Carrier contracts are confusing, and that’s all by design!
