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2017 FedEx & UPS Annual Rate Increase

A Wide-ranging Assessment of the 2017 Rate & Accessorial Fee Increase.

FedEx will Increase rates for Air Express and Ground Services on a Worldwide basis on 1/02/2017

FedEx Ground & Freight Services Rates, Domestic and International will increase by an average of 3.9%.

FedEx International Premium Service and FedEx Ground Multi-weight, plus Smart Post will also increase.

FedEx Minimum Rates for Ground Service will increase to $7.25 and for the first time it is lower than UPS.

FedEx Fuel Surcharge fees begin increasing or decreasing each and every weekly no longer each month.

FedEx Air Express and its Ground Domestic dimensional weight divisor will be increased from 166 to 139.

UPS Increase arrive early this year and it will take effect December 26, 2016 again prior to FedEx.

UPS Ground Commercial & Residential both Domestic & International rate increase an average of 4.9%.

UPS Air Express, International Services, and their Air Freight rates will also increase an average of 4.9%.

UPS Minimum Rates for Ground Service will increase to $7.32 and for the first time be higher than FedEx.

UPS Recently Added an Additional Handing Surcharges to UPS SurePost® Service for the very first time.

UPS Fuel Surcharges Fees will also follow FedEx by increasing or decreasing weekly instead of monthly.

UPS Followed FedEx and Modified Dimensional Calculations for Domestic & Canadian from 166 to 139.

Across the-board FedEx & UPS Rate Variations make it hard to calculate the actual rate increases

The 2017 General Rate Increase while similar to what we have seen in recent years, has some significant differences. One huge surprise is the deliberate new pricing course by UPS & FedEx. See – {List Rates}, {Shipment Minimums}, {Accessorial Fees}, {Dimensional Formulas}, and {Additional Handling Fees}.

Pricing standardization between UPS & FedEx is no longer a given. Both of the carriers are now more focused on rates calculated based on sizes versus actual weight of a package. Carriers have intentionally made it almost impossible to compare their rates and discounts in a bid situation or a saving comparison.

The Ground Minimum, which impacts millions of packages is an example of the rate divergence created between FedEx and UPS for the first time in years. The Ground Minimum and minimums in general are to ensure that the average amount decided for each service is always guaranteed regardless of discounts.

UPS increased the Ground Minimum to $7.32 a $0.38 cent increase from $6.94. That is about a 5.48% increase, which is much higher than the 4.9% average publicized and its impact should be measured.

 

FedEx increased the Ground Minimum to $7.25 a $0.33 cent increase from $6.94 That’s about a 4.46% package increase which now makes it about $0.07 cents less expensive than the UPS Ground Minimum

The Average increase is a very disingenuous term. Carriers are expert in receiving highest returns

A look inside the numbers reveals the true rate increase by each of the service and it is far from the 4.9% published. Ground increase 5.47% – Next Day Air overall increase 4.91% – Saver overall increase 4.73%,

2 Day overall increase 5.98% – 3 Day overall increase 4.73% – Next Day Early AM increase is 3.79%

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An In-depth Account of Actual Carrier Rate & Accessorial Fees Increase.
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A Wide-ranging Assessment of the 2017 Rate & Accessorial Fee Increase.

 

Accessorials, dim, and surcharges equate to approximately 36% of shipping costs. Crazy as it sounds, no credit is afforded to improve discounts or incentives for shippers. These fees are also not part of the 4.9% general rate increase. Adding the accessorials fees make it double-digits increase estimated at 14 to 16%

Accessorial Fees

2016 VS. 2017

Percentage Increase

AH – US Express & US Ground & Int Ground service

$10.50 to $11.00

Increased by 4.76%

AH – International Express Package Services

$10.50 to $11.00

Increased by 4.76%

Address Correction Ground & Air Express

$13.00 to $14.00

Increased by 7.69%

C.O.D. Collect on Delivery

$11.00 to $12.00

Increased by 9.09%

Dangerous Goods US Express (Accessible)

$85.00 to $90.00

Increased by 5.56%

Dangerous Goods US Express (Inaccessible)

$42.50 to $45.00

Increased by 5.88%

Declared Value per $100

$2.25 to $2.50

Increased by 11.00%

Delivery Area Surcharge Air Commercial

$2.45 to $2.60

Increased by 6.12%

Delivery Area Surcharge Air Commercial Extended

$2.45 to $2.60

Increased by 6.12%

Delivery Area Surcharge Ground Commercial

$2.30 to $2.45

Increased by 6.52%

Delivery Area Surcharge Ground Com Extended

$2.20 to $2.30

Increased by 6.52%

Delivery Area Surcharge Ground Com Extended

$2.30 to $2.45

Increased by 4.55%

Delivery Area Surcharge Air Residential

$3.70 to $3.90

Increased by 5.40%

Delivery Area Surcharge Air Residential Extended

$4.00 to $4.20

Increased by 5.00%

Delivery Area Surcharge Ground Residential

$3.70 to $3.90

Increased by 5.40%

Delivery Area Surcharge Ground Resi Extended

$4.00 to $4.20

Increased by 5.00%

Express Tag – U.S. express package services

$4.50 to $5.00

Increased by 5.40%

Ground Weekly Pick up fee – more than $75.00

$12.50 to $13.00

Increased by 4.00%

Ground Weekly Pick up fee – less than $75.00

$25.00 to $26.00

Increased by 4.00%

Hazardous Materials FedEx Ground

$30.00 to $32.00

Increased by 6.66%

Oversize Charge

$67.50 to 72.50          

Increased by 7.40%

Residential Delivery Surcharge Express Air

$3.65 to $3.85

Increased by 5.47%

Residential Delivery Surcharge UPS Ground

$3.25 to $3.40

Increased by 4.61%

Residential Delivery Surcharge FedEx @ Home

$3.25 to $3.45

Increased by 6.15%

Signature Required Adult

$5.25 to $5.50

Increased by 4.76%

Signature required Direct

$4.25 to $4.50

Increased by 5.88%

Dimensional Weight Increases Go Higher
UPS and FedEx have recently changes the dim rules again substantially. The dimensional divisor is being reduced to 139 from the current 166 a far cry from the original 194 domestic and 166 International. To tell the true impact on costs is almost impossible to project. Most parcel shippers are not aware of the impact and few have the kind of scanning equipment needed to study the situation. FedEx and UPS have all the data and can help if you ask for reports. It’s quite simple, the lower the dim divisor is the larger the impact on the costs of shipping. FedEx and UPS have resources to help you identify your box size and cut costs.

Parcel Audit Appraisal & Negotiations Group can help shippers determine the financial impact of the 2017 General Rate Increase. We are also experts at improving your Carrier Price Agreement and getting the money owed you for late deliveries, rating errors and misapplied accessorial fees. Contact us by or by phone at 978-921-0611 or email JackMitchell@PANCGroup.com.

Click for An In-depth Interpretation of Actual Carrier Rate & Accessorial Fees Increase.

Click for important information about the FedEx & UPS Rate Increase History 1998-2017

Click for important information comparing all UPS Services 2017 increase vs 2016 Pricing Comparison