UPS released its rate increases for 2012, including a net increase of 4.9% for UPS Ground packages and a net increase of 4.9% on all UPS Air services and U.S.-origin international shipments.
The rate increase for UPS Ground shipments is based on a 5.9% increase in the base rate, less a 1 percentage point reduction to the index-based ground fuel surcharge. The rate increase for UPS Air and international services shipments is based on a 6.9% increase in the base rate, less a 2 percentage point reduction to the index-based air and international fuel surcharge.
Doug Caldwell, sales director with AFMS Logistics Management Group, says of the increases: “With these increases, it's getting more difficult to maintain free shipping, just as more customers are demanding it.”
Although the increases average 4.9%, the actual increases are considerably higher for lighter weight shipments, Caldwell says. For instance, the 1 to 5-pound ground rates for the continental U.S. rose nearly 8% -- which are heavily used by B-to-C shippers.
“The hardest hit will be shippers of lighter weight packages,” Caldwell says. Although not yet announced, Caldwell believes FedEx will match UPS on the domestic ground rates through 70 pounds.
Caldwell thinks it’s a good time for companies to review shipping charges and mitigation strategies now, and not wait until they go into effect on Jan. 2, 2012.
As in past years, Caldwell says, the accessorial rate increases are somewhat higher than the base rate increases, with some accessorials seeing 10% jumps. Surcharges for residential delivery are up 9%, while the delivery area surcharge is up 8.1% for commercial and 9.1% for residential, and in extended areas 8.3%.