THE OTHER SHOE HAS FINALLY DROPPED

On December 5th UPS finally announced their General Rate Increase (GRI). Before we look at the increase it’s important to note; unlike prior years, UPS has given their customers little time to react to the new rates which go into effect December 26th 2018. The announcement comes just three weeks before the effective date and nearly a month after FedEx Corporation’s GRI announcement on November 5th which does not go into effect until January 7th.


It should be noted; by UPS pushing up the effective date for these increases, the higher rates will be able to capture the post-holiday return binge. It will also place added pressure on shippers who have to get these rates loaded and out to the field in the small time window to ensure billing is correct. UPS had no comment when asked why the rate announcement is coming as late as it has.


The acceleration of the effective date is an obvious additional revenue generator for 2018 and 2019. We want to advise shippers to check their contracts with UPS. Typically contracts require 30 days’ notice before increases can become effective. If this is the case, immediately
notify your UPS sales contact and request relief.


The rates for UPS® Ground, UPS Air and International services will increase an average net 4.9%. The following are examples of some of the most often used accessorial charges and their increases. 

  • The Delivery Area Surcharge applied to commercial and commercial extended addresses for
    Ground and Air Services will increase $0.20.
  • The Delivery Area Surcharge applied to residential addresses for Ground and Air Services will
    increase $0.30.
  • The Delivery Area Surcharge applied to residential extended addresses for Ground and
    Air Services will increase $0.40.
  • The Delivery Area Surcharge applied to commercial addresses for UPS Hundredweight
    Service®, Air and for UPS Hundredweight Service® Ground will increase $0.75.
  • The Delivery Area Surcharge applied to residential addresses for UPS Hundredweight Service®
    Air and for UPS Hundredweight Service® Ground will increase $1.00 per shipment.
  • The Delivery Area Surcharge applied to residential extended addresses for UPS
    Hundredweight Service® Air and for UPS Hundredweight Service® Ground will increase $1.25
    per shipment.
  • The Remote Area Surcharge for Alaska will increase $2.00.
  • The Remote Area Surcharge for Hawaii will increase $1.00.
  • For international import packages, the Delivery Area Surcharge and Delivery Area Extended
    will increase $0.10. For international packages with non-US origins or destinations, the
    Extended Area Surcharge and Remote Area Surcharge will increase $2.00 per shipment or
    $0.02 per pound.
  • The Residential Surcharge for domestic UPS® Ground Service, UPS® Standard to/from Canada
    and UPS® Standard to/from Mexico shipments will increase $0.35.
  • Residential Surcharge for domestic UPS Air Services and UPS International Air Services will
    increase $0.40.
  • The Residential Surcharge for UPS Hundredweight Service® shipping will increase $2.65 per
    shipment.
  • The Address Correction charge will increase $0.50. The per-shipment maximum will increase
    $3.50.


While shippers may have contracts with specific caps on their GRIs or various other charges they still need to understand the impact of these changes on their business. That is where Data2Logistics comes in. We analyze your shipments and can help you to determine the financial impact of the increases that will be applied to your business. We can also identify actions that you can take to mitigate these price increases. To learn more contact Harold B. Friedman at harold.friedman@data2Logistics.com, or 609 577 3756. We are here to support you!