Key points:
- An estimated 100 million packages will be delivered per day by 2026
- UPS added a surcharge that affects high-volume shippers on October 30th 2022
- On January 3rd 2022 FedEx Express and FedEx Ground rates increased by an average of 5.9%
Shipping costs spiked in 2020 and continue to climb through to 2022. 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 up to 91% off retail rates from all carriers. You can see the savings for yourself by trying our free shipping rate calculator.
Table of Contents
New Demands Carry Costs
Shipping carriers are overwhelmed by the crush of door-to-door shipments caused by Covid, 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.
On January 3rd 2022 FedEx Express and FedEx Ground rates increased by an average of 5.9%.
Here’s a quick overview of the surcharges and price increase from FedEx and UPS for 2022:
- The additional handling surcharge for both carriers, the Oversize surcharge for FedEx, and the Large Package surcharge for UPS will vary due to the package shipments zone
- 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.
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FedEx Surcharges for 2022
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.
Peak Surcharge
Applies to: FedEx Package Ground Economy (formerly SmartPost)
Cost: $1.50 (Oct. 31 - Nov. 27, Dec. 12 - Jan. 15)
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: $3.45 (Sept. 5 - Oct. 2) $6.55 (Oct. 3 - Jan. 15)
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: $39.50 (Sept. 5 - Oct. 2) $68.75 (Oct. 3 - Jan. 15)
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: Based on shipper’s “peaking factor” (Oct. 31 - Jan. 15)
FedEx Rate Increases for 2022
Carriers typically increase their shipping rates each year. Doing so helps shipping companies to remain competitive and offset the cost of inflation.
A good example of an average rate increase is: If someone ships 60% more during the week starting October 24th than they did from June 6th-July 3rd, they will see an increase of $2 per package shipped with FedEx Ground from November 14th.
Related post: eCommerce Peak Season Toolkit
UPS Surcharges for 2022
Note: Peak Season surcharges do not impact Easyship’s UPS rates.
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: $40 per package + 3.50 per package additional handling surcharge (this will increase to $70 per package + $6.50 additional handling fee from October 2nd 2022-January 12th 2023
Pro tip: Learn how to measure boxes for length and girth to avoid any surcharges.
Peak Surcharges from International Countries to the US
UPS peak season surcharges have been added on a variety of international shipping services to the US, which vary by country. Here are the new peak demand surcharges for each service in all impacted countries.
China and Hong Kong into the US
Australia, New Zealand or other Asia origins to the US
Applies to any shipment from Australia, New Zealand, Vietnam, Japan, Korea, Malaysia, Thailand, Indonesia, Singapore, Philippines, or Taiwan to the U.S. until further notice.
US to Europe
UPS Peak Holiday Surcharges and Rate Changes 2022
From October 30th 2022-January 14th 2023, UPS is adding a surcharge that will impact high-volume shippers. This peak surcharge will apply to certain UPS Air Residential, UPS Ground Residential and UPS SurePost packages that UPS has billed for over 20,000 parcels during any week after October 2021. So if you want to avoid this charge, keep in mind that the 20,000 average weekly volume is the maximum limit before the surcharge occurs.
USPS Service and Shipping Rate Increases for 2022
From 2022, the USPS price changes are as follows:
- If a package has missing or incorrect dimensions that result in any dimension-based fees, a $1.50 surcharge is applied
- Media Mail sees a 9% increase
- First-class mail stamps increase to $0.60 from $0.58
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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