Just in time for holiday returns and exchanges, UPS swoops in with a substantial rate increase a few days after Christmas. On November 18, 2019, UPS announced its 2020 general rate increase (GRI) of 4.9% will go into effect on December 29, 2019. The rate changes apply to UPS Ground, UPS Air and International services. This latest announcement comes on the heels of the company’s Peak Surcharges announced in September for large and additional handling packages.
In addition to the GRI, UPS announced new fees for supplemental services that the carrier provides, as well as a change in zip codes where surcharges will be applied. These changes include:
- Rebill fee will be assessed for billing account changes for a shipment.
- Prohibited item fee added to packages containing prohibited articles or restricted articles.
- Value-added services and other charges to undeliverable packages returned to the shipper.
- Late payment fee assessed on invoice if not paid in full by the invoice due date.
- Additional Handling surcharge weight threshold lowered to 50 pounds from 70 pounds.
- Changes to Delivery Area Surcharges and Extended Area Surcharges by ZIP.
UPS Rate Increases at a Glance:
When the increase transpires, UPS’ ground rates will be comparable to FedEx’s. In fact, for most services, UPS’ prices will surpass those of FedEx, save for the three-day service at a substantial 16% difference. Businesses will need to update their shipping strategies to realize profits in the coming year.
Large and Oversized Package Increases
Big changes for big packages are on the horizon next year. UPS will be raising their large and over maximum limits fees to align more closely with FedEx’s fee structure. Commercial shipments of large packages will rise to $100, a 5.3% increase; residential shipments jump to $120. Over maximum limits rise 2.9%, handling charges by weight rise 4.3%, and 5.3% for dimension.
Delivery Area Surcharge Updates
The Delivery Area Surcharge update incorporates an additional two thousand zip codes while transferring some zip codes over to EAS, more closely mimicking FedEx’s list. Likewise, UPS’s DAS/EAS rates will mirror FedEx’s rates next year. The outcome will be sizeable increases for commercial deliveries, topping 22%.
Common Surcharge Rate Increase
January will usher in three new surcharges:
Prohibited Item Fee: $150 – packages containing items prohibited by the service guide.
Rebill Fee: $17 – apples to packages with billing account changes.
Entry Type 86 Processing Fee: $10 – applies to requests for single entry on any package qualifying for customs clearance.
UPS will sunset the $1.50 access point delivery charge. Although most rate increases align UPS’ fee structure with FedEx’s, additional handling charges on packages exceeding fifty pounds will be the largest deviation between the two carriers.
Full details on these rates changes can be found here: UPS 2020 GRI