Shipping costs spiked in 2020 and continue to climb in 2021. The post-pandemic surge in eCommerce has strained the delivery systems of domestic carriers to capacity. In a world of expedited delivery and frequent returns, UPS and FedEx are raising prices to compensate for their elevated delivery costs.
This blog explains the new surcharges and shipping rate increases from US domestic carriers like USPS, FedEx and UPS.
To offset these rate hikes, Easyship can save you an average of 17% off retail rates from all carriers. You can see the savings for yourself by trying our free shipping rate calculator.
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New Demands Carry Costs
Shipping carriers are overwhelmed by the crush of door-to-door shipments caused by Covid-19, then eCommerce. An estimated 100 million packages will be delivered per day by 2026, and 90% of this growth will be from eCommerce.
The delivery systems of FedEx and UPS weren’t designed to handle huge shipment volumes, much less the returns for an estimated 30-40% of eCommerce orders. Carriers are rushing to implement eCommerce-friendly delivery systems, but they’re not ready yet.
In February 2021, both FedEx and UPS announced that their holiday surcharges would remain in effect until demand diminishes. According to a report by Jeffries, shippers should expect these fees to remain for the foreseeable future.
Here’s a quick overview of the surcharges and price increase from FedEx and UPS for 2021:
- Extended “holiday” surcharges on various services
- $0.30 per package surcharge if you ship 25,000+ packages per week
- 5-6% annual rate increase
Shipping is already a major operation cost for small and medium-sized businesses. To help you pick the cheapest courier service going forward, the following sections list out all these surcharges in detail.
FedEx Surcharges for 2021
FedEx added four new US domestic surcharges in 2021. Fortunately, these surcharges rarely overlap and most can be avoided with careful shipping practices.
Surcharges are also specific to the shipping service. This means you can dodge added fees by changing up your delivery method.
Applies to: FedEx Package Ground Economy (formerly SmartPost)
Cost: $1 per package
Pro tip: eCommerce merchants can recoup this new fee plus some with Easyship. You instantly save at least a few dollars on every FedEx shipment when you use Easyship. Learn more.
Additional Handling Surcharge
- Applies to: FedEx US Ground Services, International Ground Services, US Express Package Services
- When: the package doesn’t conform to the standards for package weight, size, and packaging for the chosen service
- Cost: $3.50 per package
Pro tip: Make sure your package doesn't exceed the weight and size limitations of your shipping service. Also, be sure to package your items securely to avoid getting hit with surcharges.
Peak Oversized Charge
- Applies to: US Express Package Services, US Ground Services, International Ground Services
- When: your package exceeds the weight limits of any these services
- Cost: $30.00 per package
Pro tip: Couriers assess weight by the final package weight, not the item. Using lightweight packaging can help you trim ounces from hefty boxes.
Residential Delivery Peak Charge
If you ship more than 30,000 packages per week, FedEx may charge you $0.60 per package for a Residential Delivery surcharge.
- Applies to: all FedEx Ground and FedEx Express deliveries to US residences
- Exempt: FedEx Ground Economy and FedEx One Rate
- Cost: $0.60 per package
FedEx Rate Increases for 2021
Carriers typically increase their shipping rates each year. Doing so helps shipping companies to remain competitive and offset the cost of inflation.
In 2021, FedEx shipping rates increased by an average of 4.9% across US domestic, export and import services.
UPS Surcharges for 2021
UPS updated its surcharges for peak shipping in June 2021. Unlike FedEx’s new fees on domestic shipping, UPS has levied an array of surcharges on international shippers exporting to the US. Here’s the breakdown:
Large Package + Additional Handling Peak Surcharge
- Applies to: packages longer than 96 inches, or exceeding 130 inches in combined length and girth
- Cost: $31.45 per package + 3.00 per package additional handling surcharge
Peak Surcharges from International Countries to the US
UPS has implemented surcharges on a variety of international shipping services to the US, which vary by country. Here are the new surcharges for each service in all impacted countries.
China and Hong Kong into the US
Japan to the US
Taiwan to the US
APAC/Australia to the US
Includes shipments from Australia, New Zealand, Korea, Vietnam, Malaysia, Thailand, Indonesia, Singapore, and the Philippines.
Europe to the US and North America
Includes Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Hungary, Ireland, Italy, Luxembourg, Netherlands, Norway, Poland, Portugal, Spain, Sweden, Switzerland, or the United Kingdom to the U.S. and North America.
UPS Ground Residential/UPS SurePost Surcharge
If you shipped 25,000+ packages during any week after February 2020, you may be charged a peak surcharge for using the UPS Ground Residential and UPS SurePost.
- Applies to: UPS Ground Residential and UPS SurePost
- When: you shipped 25,000+ packages during any week after Feb. 2020
- Cost: $0.30 per package
UPS Shipping Rate Increase for 2021
As expected, rates for all UPS Ground, Air, and International services increased an average of 4.9% in 2021. Here’s the specific rate increases for the most popular UPS shipping services:
- UPS Ground: 6.4%.
- 3 Day Air: 5.83%
- 2 Day Air: 4.87%
- Next Day Air Saver: 3.38%
- Next Day Air: 4.80%
USPS Shipping: One New Surcharge
Fortunately, USPS won’t be adding any surcharges to typical shipments for 2021. The only post-pandemic surcharge from USPS is for oversize packages, but the price is quite steep.
USPS Oversize Parcel Surcharge
Applies to: Priority Mail Express, Priority Mail, Parcel Select, Parcel Return Service, USPS Retail Ground, First-Class Package
When: your parcel exceeds the maximum mailable size limit of 130 inches of combined length and girth
Cost: $100 per package
Pro tip: Learn how to measure boxes for length and girth to avoid any surcharges.
USPS Shipping Rate Increases for 2021
In January 2021, USPS announced that the following services would be seeing a price hike going forward:
- Priority Mail service: 3.5%
- Priority Mail Express service: 1.2%
- First-Class Package Service (FCPS) Commercial: 6.5%
- First-Class Package Service (FCPS) Retail: 4.8%
As always, you can save on USPS shipping – FedEx and UPS, also – with Easyship. Just check out these savings on USPS shipping from our free shipping rate calculator.
Your savings on the retail rates appear in yellow next to the price.
With savings averaging 20% for USPS shipping, you can really reduce your shipping costs with Easyship. For a full list of all discounts on USPS shipping, here's a full breakdown of all Easyship USPS rate discounts.
Offset Rising Shipping Costs with Easyship
Until FedEx and UPS can better manage the crush of eCommerce orders, surcharges are here to stay. These surcharges are especially taxing for high-volume shippers, but also for international shippers who use UPS.
We’ll keep you posted about any new surcharges and rate increase as we hear of them.
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