Your Carrier Isn’t Overcharging You

Every year around this time, my inbox fills up with the same email. The carriers announce their general rate increase, a shipping manager forwards it to me, and the subject line is always some version of “can you believe these people?”

This year it’s 5.9%, and the outrage is right on schedule. I get it. Nobody likes opening a letter that says next year is going to cost more.

But I’ve come to think we’re mad at the wrong thing, and it reminds me of something I learned a long time ago on a basketball court, from a coach who didn’t care one bit about my feelings.

I played for a man named Gary Russell from seventh grade all the way through high school. My ninth-grade team showed up that season a little full of ourselves, fresh off a city championship. Mid-game, I picked off a pass, took off down the court with nobody near me, and blew a wide-open layup. Embarrassing, but it happens. Then about a minute later, a teammate did the exact same thing.

Coach Russell called a timeout, walked us over to the baseline, and made the whole team run layup drills right there, in front of the crowd and the team we were busy beating. The lesson stuck with me for good. Winning last season doesn’t count for much if you’ve stopped practicing the fundamentals.

Your shipping invoice is a fundamentals problem. And like my ninth-grade self, most teams would rather look anywhere except at the layup they just missed.

The rate increase is the wrong thing to watch

The general rate increase is the number carriers put in a press release, so it’s the one everybody argues about every fall. It’s also the one that barely moves. It’s sat at 5.9% almost every year since 2022.

If the headline were really driving your costs, you’d have been fine this whole time, and most teams haven’t been. Their costs keep climbing in the years the headline holds flat, which tells you the real money is somewhere else. It’s in all the charges stacked on top of the base rate, and most of those trace back to something you did.

Shippers can feel this, even when they can’t quite name it.

In a survey we ran this summer, shipping costs and surcharges came back as the number one peak-season concern, ahead of every other issue, with nearly one in three naming it their single biggest worry. They’re worried about the right thing. They’ve just been watching the wrong number for it.

A surcharge is really just a receipt

A surcharge isn’t the carrier being greedy. It’s closer to a receipt, an itemized record of a decision somebody at your company already made.

That additional handling fee is what it costs to ship a box that got spec’d an inch too big, or a product that’s mostly air.

A delivery area surcharge is the price of the “free shipping, anywhere” promise marketing made without ever checking a zone map.

A dimensional charge usually goes back to one packaging call, made once, that you’re now paying for on every order that leaves the building.

None of that came from the carrier. They’re just the ones holding the calculator. That’s a harder thing to sit with than carrier greed, because it means the missed layup was ours. It’s also the only version of the story where you actually have the ball.

The cost gets set upstream, where nobody sees the bill

There’s a structural reason this stays so hard to see. The decisions that create the cost all happen upstream, and shipping is the one place they finally show up with a dollar figure attached. That same survey found all-in shipping cost was the single biggest blind spot shippers named, the place they said they have the least visibility of all. Of course it is.

Merchandising picks the packaging, marketing sets the delivery promise, and product decides the dimensions, and none of those people ever open the invoice. By the time it lands on the operations team’s desk, months have gone by and the decision that caused it is three departments away. So ops does the only thing it can with a bill it didn’t write, which is call the carrier and ask for a discount.

We end up spending all this energy negotiating the price of decisions we could have just made differently to begin with.

You can’t argue your way out of a missed layup

Coach Russell never let us blame the ref, and he had a point. You don’t get the game back by arguing the call. You get it back by running your drills. It works the same way here. Stop auditing the invoice to shave a few points off it, and start reading it for what it’s telling you about your own decisions.

Every surcharge that shows up over and over is pointing at a specific choice. The oversize fee on the same SKU every week is a packaging spec nobody’s revisited since launch. The residential surcharges piling up on one lane are a carrier default you set once, years ago, and never went back to.

So here’s the first drill: pull a single month of accessorials, rank them by SKU and by lane, take the top three, and put a name next to each one, whoever actually owns the decision behind it. That’s your starting list.

You can do all of it by hand, and plenty of teams do, with an afternoon and an unreasonable number of spreadsheet tabs.

Or you can let the technology do it for you, which is one of the few spots where I think the tech really earns its keep, because this is a data problem, and data problems are what software is good at.

Luma AI Insights breaks your spend down by accessorial, SKU, and lane, so the pattern that used to eat an afternoon just shows up on a screen, and you can ask it a question in plain language instead of building one more pivot table.

An operator I was talking with recently did this and found, in about ten minutes, that a single oversized product was behind most of her additional handling fees. She redesigned one box, and the charge mostly went away. She’d been budgeting around that number for two years, sure it was just the cost of doing business, when really it was one decision nobody had circled back to.

The same logic sorts out that surcharge-heavy lane.

A better contract won’t do it, but routing those packages to the carrier that prices that ZIP best, every time a label prints, will. That’s a call that’s too small and happens too often for a person to make by hand on every shipment, which is exactly the kind of thing you want software handling.

Luma AI Select compares carriers the moment a label’s created and picks the best-value option on every order, instead of once a quarter when somebody remembers to look. More carriers in your account won’t lower your bill on their own. Using them differently, on every shipment, is what does it.

The takeaway

That 5.9% letter is going to land again next fall, and the outrage will follow right behind it, along with the same scramble for a slightly better contract. It’ll still be the least useful number in the conversation.

Your invoice isn’t the carrier’s opinion of you. It’s a pretty honest scoreboard of the decisions your own company made. So quit arguing the call, and go run your drills. The costs you can actually change are the ones that already have your fingerprints on them.

Before next peak lands, it’s worth knowing how exposed you actually are. Our five-minute peak stress test will tell you, no signup required.

Frequently asked questions

What is a general rate increase (GRI)?

A general rate increase is the annual percentage bump carriers apply to their base shipping rates. For 2026, the major national carriers set it at 5.9%, roughly where it has sat almost every year since 2022. Because it applies only to base rates, it rarely reflects the total increase a shipper actually pays.

Why is my effective shipping rate higher than the announced rate increase?

Because the general rate increase touches only base transportation rates. Accessorial surcharges, including additional handling, delivery area, and dimensional fees, rise on their own schedule and stack on top of the base rate. Tightening dimensional thresholds also pull more packages into surcharge territory without any rate changing. Together, these push your effective rate above the headline number.

How do I lower my shipping surcharges?

Trace each recurring surcharge back to the decision that triggers it. An additional handling fee usually points to a packaging spec, and a delivery area surcharge to a delivery promise or a carrier default. Fix the decision at the source, and automate carrier selection so each label goes to the best-value carrier. That lowers cost more reliably than renegotiating a contract.