UPS Ends COVID Tier Pricing Freeze, Increases Prices
Some shippers are now seeing cost increases anywhere from 10-30 percent in the wake of UPS’ freeze ending. These discount tiers were rolled out in the wake of COVID-19 having a direct impact on shipping volume decreases. Some shippers have now dropped 2-3 tiers, resulting in a significant increase in shipping prices.
When COVID initially emerged, UPS took a proactive approach and implemented a policy that froze customer discounts if their rolling package average dropped a portfolio tier. This 52-week rolling average number was taken on March 7, 2020, with freezes starting in April of 2020.
This change comes as a surprise for many UPS customers, as this freeze provided relief from peak season surcharges that have impacted carriers over the last 1.5 years. At the end of 2020 and going into 2021, some companies that were part of the freeze came off of the freeze because their shipping volumes have picked up. However, the majority of customers opted to stay on the freeze as long as possible.
In early July, many but not all UPS customers were taken off of the freeze without warning. These customers are now forced to cope with shipping costs up to 30 percent more expensive than their freeze rates, a huge financial adjustment ahead of the peak shipping season.
What Impacted Customers Can Do
If you were a UPS customer who was part of the freeze, make sure you are keeping a close eye on your rolling package average to have a good understanding of the tier you fall into if the freeze is removed. Having this information on hand can help you address the change as quickly and proactively as possible with your carrier.
FedEx also implemented a similar freeze, but it is unclear as of now whether or not their freeze is still in place. EasyPost will continue to keep you updated as companies announce additional freeze-related information.