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Jillian Voege

UPS Rate Increases for 2017

by Jillian Voege
UPS worker checking laptop next to truck

UPS just announced their general rate increases, most of which will take effect on December 26th, 2016. Take a moment to get your groans and complaints out now.

Daily rates for UPS Ground, Air, and International services will increase an average net 4.9%. So that alone will raises the floor of your UPS shipping bill. But there are some other major rate hikes that you should be aware of:

Additional Handling Surcharge

The Additional Handling charge will increase by $0.35 and will now apply to any package with a length exceeding 48 inches (as opposed to 60 inches before). Effective January 8, 2017, the Additional Handling charge will also apply to UPS SurePost packages.

UPS - like FedEx - is trying to recoup costs when it comes to space. It seems with these rate changes, both FedEx and UPS are experiencing issues with taking on large packages regardless of weight. With this increase in rate and application of the Additional Handling Surcharge, one can expect to see further size-related surcharges to stick onto their UPS invoices down the road.

Other size-related surcharge increases include:

  • Over Maximum Limits charge will increase $3.50
  • Over Maximum Pallet Handling Surcharge will increase $3.50
  • Large Package Surcharge will increase $2.50
Residential Surcharges

Here are the increases to residential delivery surcharges from UPS:

  • Residential Surcharge for UPS Ground, UPS Standard to/from Canada, and UPS Standard to Mexico shipments will increase $0.15
  • The Residential Surcharge for UPS Air and UPS International Air shipments (imported to the U.S. or destined for Canada while billed to a U.S. payer) will increase $0.35
  • The Residential Surcharge for UPS Hundredweight shipments will increase $1.30
  • The Residential Surcharge for UPS Worldwide Express Freight shipments will increase $5.00

So across the board, UPS will be taking more money to deliver to residential addresses in 2017. This greatly affects ecommerce businesses, as the majority of their outgoing packages will be sent to residences. The reasoning behind these surcharges is the difficulty for UPS and FedEx to perform "last mile delivery." Their fleet and infrastructure isn't built to access every single neighborhood without purchasing battalions of new trucks. So as a way to recoup costs from "last mile delivery," one can continue to see rising Residential Surcharges as ecommerce continues to grow.

Other Important Rate Increases
  • Address Correction surcharge will increase $0.40 (maybe you'll want to invest in an address verification solution?)
  • Delivery Confirmation (both Signature Required and Adult Signature Required) will increase $0.25
  • UPS Delivery Intercept requests will increase $0.50 for requests made electronically and $0.70 for requests made by phone