UPS Announces 2015 General Rate Increase
While arguably true, make no mistake about it: these changes will amount to one of the largest rate increases in the history of the parcel industry. The majority of ground residential packages are less than three cubic feet. Shipware estimates that 35 percent to 50 percent of all UPS ground packages (commercial and residential) will be adversely impacted by the new rules.
It's also noteworthy that UPS Freight (LTL), which historically has taken its rate increase the first week in April, will implement its rate increase on Dec. 29, 2014 to coincide with the rest of the UPS product portfolio. Of course, exercising the increase three months earlier lends tremendous financial benefit to UPS by shifting millions of dollars away from shippers earlier in the year. This year's average increase of 4.9 percent tops the 2014 average increase of 4.4 percent.
Accessorial charges for all services are also increasing. Increases are shown in parentheses (partial list): additional handling service ($.25), address correction ($.15), delivery area surcharges ($.10 to $2.50), collect on delivery ($.50), customs brokerage ($2.50), delivery confirmation ($.10 to $.13), delivery intercept ($.15 to $.50), large package surcharge ($.90), on-call pickup ($.15 to $.50), over maximum limits ($5.85), residential surcharges ($.15 to $10.00).
Shippers interested in determining the exact impact of these rate increases for their unique distribution should contact me at email@example.com.
Rob Martinez is the CEO of Shipware LLC, a professional services firm that transforms businesses through intelligent distribution solutions and strategies. Rob has helped some of the world’s most recognizable brands reduce parcel shipping costs an average of 25 percent through contract negotiations, rate benchmarking, modal optimization, invoice audit and other savings vehicles. A cum laude graduate of UCLA, Rob has 20 years of transportation industry experience, including executive positions at DHL and Stamps.com, in addition to his work as an outside consultant since 2001.