United Parcel Service Inc. and FedEx Corp. will increase their rates for standard ground shipping—the most common shipping method used by online retailers to deliver goods to consumers—by an average of 4.9% next year after factoring in a one percentage point reduction in fuel surcharges, the companies say.
At FedEx, the average 4.9% rate hike will take effect Jan. 7 and cover shipments of parcels weighing up to 150 pounds through FedEx Ground and FedEx Home Delivery. At UPS, the average 4.9% rate hike goes into effect Dec. 31 for UPS Ground Services, also for parcels of up to 150 pounds.
Ken Wood, president of shipping advisory firm LJM Consulting, notes that the lighter the package, the higher the rate increase. And because most online retailers ship packages of 30 pounds or less, their average rate increase will run higher than 4.9%, he says. “Overall, most e-commerce retailers will have a rate increase of about 7% or 8%,” he says.
For shipments forwarded by UPS and FedEx to the United States Postal Service for local residential deliveries under the USPS’s Parcel Select program, the USPS is increasing shipping rates by about 9%, effective Jan. 27, the USPS says.
In addition, UPS and FedEx are increasing for 2013 surcharges and accessorial fees, such as surcharges for delivering to residential addresses and fees for handling packages with incorrect address labels. According to Wood, UPS and FedEx will impose a surcharge of $2.80 for delivering to a residential address, up about 10% from $2.55 in 2012. The shipping carriers also tack on additional surcharges for residential addresses in remote areas. Other surcharges in 2013 will include $12 for correcting an address, up from $11 in 2012, Wood says.
UPS will also increase its rates for air and international shipments by 6.5%, which will drop to 4.5% with a two percentage point reduction in the fuel surcharge.
At FedEx, air shipments via FedEx Express will rise by an average of 3.5% after decreases in fuel surcharges, the company says.
For shipments of furniture or other bulky items weighing 150 pounds or more, UPS and FedEx raised their less-than-truckload freight rates last summer. Less-than-truckload, or LTL, shipments typically consolidate multiple loads from multiple shippers.