Coming on the heels of the 2021 FedEx shipping increases, the 2021 UPS Rate Increase is here! UPS announced increases in the 2021 shipping rates. In short, the rates for UPS ground, air, and international services will increase an average net 4.9% effective December 27, 2020.
In addition to daily package rates increasing, there are other changes that will increase your shipping charges. Effective January 10, 2021, additional handling applies to any package with its length plus girth combined surpassing 105 inches. These are in addition to the many accessorial fee increases we covered in our 2021 UPS Rate Increase, Part 1: Accessorial Fee blog post.
UPS Price Increase
2021 UPS Rate Increases
Additionally, the rate increase for the domestic rates is above and below 4.9% for different services. The increase is not 4.9% for each service. The two services with the highest rate increase are 2-day air and 3-day select, with 5.47% and 5.40%. This increase is lower than in 2020. With the Amazonification of e-commerce and buyer preferences, these are the two services that will see the most significant increase in usage in 2021. Customers want to ship at a cheaper cost and receive packages as soon as possible.
UPS Ground Price Increase in 2021
UPS Express Price Increases for 2021
Minimum Charge Increase
All UPS packages are subject to a minimum charge as we have discussed in a past blog post. In fact, no matter how great your discounts may be, every package is subject to this rule and you could be losing valuable discounts. In 2020 the minimum package charge was $8.23. This will increase by 6.44% and become $8.76 in 2021, 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 $8.76.
How to Mitigate the Yearly Shipping Rate Increase
So, most businesses will accept the 2021 UPS rate increase without any hesitation. Furthermore, they merely transfer the additional logistics cost to the end user’s fees. Shopping cart abandonment is highly dependant on shipping costs. Now’s more crucial 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 decrease these costs with full contract analysis and agreement renegotiation. Also, some of our UPS clients will not have this increase impact their shipping costs. They negotiated to have transportation rates, value-added services, and other charges on the 2020 UPS Rate and Service Guide through December 2021.
Contact your UPS representative to request an exemption to the yearly price increases, or contact us at Refund Retriever. In conclusion, we can evaluate your shipping needs and help with a UPS contract negotiation.
