Brace Yourself for Higher UPS Surcharges in 2024

UPS released its 2024 shipping rates, matching FedEx GRI rates of 5.9%.  The real increase is found within the surcharges, which can drive a shipper’s cost much higher. Our team is actively reviewing these changes – and providing custom advisory analysis to our clients in time to avoid some of the most significant impacts.   

The GRI does not tell the whole story for shippers. Not even close. The new UPS announcement includes far more detail about surcharge increases that will be added to its freight rates for the new year. Consider these significant rate hikes:

• A 12% average increase in UPS domestic surcharges
• A 20% average increase in additional handling surcharges
• An 8% increase in the ground residential surcharge, which will rise to $5.70
• A whopping 21% average increase in large package surcharges, capped at $235.00 per package for Residential Zone 5+
  

There’s no question that these charges represent a new challenge for shippers who are already grappling with the effects of general inflation, higher labor expenses and rising fuel costs.  

How can you protect your already thin margins, while still delivering the outstanding service your customers expect? These are some of our main concerns as we advise you through the parcel mediation process.  Our unique process focuses on understanding your business and takes the onus off of your team.

Redwood: Your Partner in Navigating These Changes

With 20 years of experience, hundreds of satisfied customers and over $5.5B in freight under management, Redwood knows parcel shipping. Redwood’s expert team of seasoned professionals includes former UPS employees who have “been here, done that” when it comes to navigating carrier pricing and contracts. 

Redwood can not only advise shippers on winning strategies to use during contract negotiation, but it can also analyze your granular data and overall shipping profile to create optimized shipping plans. Via process automation, smarter packaging practices, route optimization, the use of alternative carriers and other strategies, Redwood can help you keep your customer promises, while also maximizing your profit margins. 

Redwood’s industry-leading Parcel Execution services enable you to automatically select the best available rate as you leverage a broad carrier network that includes UPS and FedEx — but also considers other options in light of the recent rate hikes.  

Feel Empowered, Not Powerless, in Light of These Changes

There’s no arguing that UPS and FedEx are significant forces in the global parcel shipping industry. Any rate increases by these industry leaders will have repercussions for companies whose service model includes parcel delivery. 

But there are many other carriers out there, and many other forces at work in the global shipping industry. Redwood’s unique expertise, hands-on experience and strategic insights can empower your business to seize control of its shipping activities and successfully navigate these new charges, as well as other trends and changes.  

What do the UPS rate hikes really mean for your overall shipping costs in the new year? What changes will you need to make in your day-to-day activities to optimally balance cost with service? And what should you be doing right now to prepare? These are great questions. Reach out to Redwood to start getting answers.