Death, taxes, and General Rate Increases (GRIs). If you ship with UPS or FedEx these things are guaranteed. With both carriers’ 2021 GRIs going into effect soon we’ve been wondering whose service will become more expensive.
Let’s take a look at how these GRIs play out over different service levels, zones, and weight breaks.
Average Increase: Look for equal increases.
Both companies matched each other’s average increase as they’ve done in the past. This is because, as we’ve previously pointed out, GRIs are never applied evenly across the board. Increases largely depend on your shipping profile. “You could actually see your rates go down.” Brad Hollister, SwanLeap CEO, notes. “If a carrier previously increased rates in certain areas and lost customers they may lower their base rates to attract new customers in those lanes.”
Weight Breakdown: Again, both UPS and FedEx are almost cell for cell in weight based increases.
UPS matched FedEx in zones 2-8, (1-10 lbs.) leaving virtually no difference between rate cards.
Minimum Net Charge: FedEx is slightly less expensive here.
FedEx posted the lowest amount of minimum increases and the lowest minimums on average.
Surcharges: FedEx has fewer surcharges than UPS
When it comes to surcharges, FedEx is $1.25 lower per occurrence than UPS. FedEx also raised its Additional Handling surcharge for packaging much higher than UPS.
Before we end this, it’s important to point out some completely new charges that each carrier is applying.
FedEx New Charges:
- 6% percent late payment fee
- Additional Handling Dimension Qualification
- Measures greater than 105 inches in length + girth
- DAS Zip Code Changes:
- Added 709 to contiguous US list
- Moved 121 from contiguous US list to the contiguous US extended list
- Moved 1,078 from contiguous US extended list to contiguous US list
- Removed 430 from contiguous US list
UPS New Charges:
- Zone-based pricing for Additional Handling and Oversize surcharges (details coming April 2021)
- Additional Handling Dimension Qualification – Measures greater than 105 inches in length + girth
- Ship to UPS Access Point Location: $2.99
- DAS Zip Code Changes:
- Added 711 to DAS
- Added 515 to DAS Extended
- Moved 121 from DAS to DAS Extended
- Moved 1,082 from DAS extended to DAS
- Removed 433 from DAS
- Removed 9 from DAS extended
Both providers are targeting low-weight residential packages with the highest increases (probably because the eCommerce boom is here to stay). As is always the case with GRIs, everyone can expect some increase in cost. It’s also important to look at the role technology can play in insulating you from these charges. Having the power to shop regional carriers alongside major parcel carriers from one single platform unshackles you from meeting volume discounts while allowing you to ship at market rate. And with supply chain analytics it’s possible to remain agile because you know what the market is doing in certain regions.