It’s that wonderful time of year where we contemplate our New Year Resolutions and adjust for the Shipping Carrier Rate Increases. Please take a moment to review some of the changes coming in 2021 and adjust your shipping charges accordingly.
Peak Surcharge Changes
UPS Peak Surcharges
Effective January 18th, 2021 until further notice, the following Peak surcharges change:
• UPS Ground Residential Peak Surcharge is reduced from $1.00 – $3.00 to $0.30 per package.
• UPS Surepost Peak Surcharge is reduced from $1.00 – $3.00 to $0.30 per package.
• UPS Air Peak Surcharges are discontinued.
• UPS International Peak Surcharges remain unchanged at $0.11 per lb.
• UPS Additional Handling Peak Surcharge is reduced from $5.00 to $3.00 per package.
• UPS Large Package Peak Surcharge is reduced from $50.00 to $31.45 per package.
FedEx Peak Surcharges
Effective January 18th, 2021 until further notice, the following Peak surcharges change:
• FedEx Ground and Home Delivery Peak Surcharges are discontinued, but will go to $0.30 per package on February 15th.
• FedEx Smartpost Peak Surcharge is reduced from $1.00 – $2.00 to $0.75 per package.
• FedEx Express Peak Surcharges are discontinued, but will to to $0.30 per package on February 15th.
• FedEx International Peak Surcharges remain unchanged at $0.10 per lb.
• FedEx Additional Handling Peak Surcharge is reduced from $4.90 to $3.00 per package.
• FedEx Oversized Peak Surcharge is reduced from $52.50 to $30.00 per package.
USPS Peak Surcharges
Effective December 28th, 2020, until further notice, the following Peak surcharges change:
• All USPS Peak Surcharges are discontinued.
Annual General Rate Increases
UPS – Effective December 27th
UPS Ground and Express
UPS’s general rate increase this year is fairly consistent with previous years. Ground and Express will all increase by an average of 4.9%; however, please note that this is an average across all weights and zones. Packages in the 1-5 lb. range will increase by an average of 6.6%, while those of heavier weights will be less.
Accessorial charges are also increasing as follows:
Address Corrections
The Address Correction surcharge will increase $1.00 to $18.00.
Area Surcharges – Ground
For packages delivered to certain Zip Codes within the 48 contiguous states:
• Delivery Area Surcharge applied to commercial addresses will increase $0.15 to $3.10.
• Delivery Area Surcharge applied to commercial extended addresses will increase $0.25 to $3.70.
• Delivery Area Surcharge applied to residential addresses will increase $0.30 to $4.30.
• Delivery Area Surcharge applied to residential extended addresses will increase $0.50 to $5.90.
• Delivery Area Surcharges will apply to more zip codes than in previous years.
• Delivery Area Surcharges for Air/Express shipments are slightly higher than those of Ground.
Residential Surcharges
The Residential Surcharge will increase $0.35 to $4.45 for Ground and $0.30 to $5.00 for Air/Express Services.
Additional Handling Surcharges
All three categories of the Additional Handling Surcharge are increasing.
• Weight (Greater than 50 lbs.) will increase by $1.50 to $25.50.
• Packaging will increase by $1.00 to $15.25.
• Dimension will increase by $1.00 to $16.00. The criteria continues to include: Longest side exceeding 48”, Second Longest side exceeding 30”; however, in addition, effective January 10th, 2021, a package with its Length plus Girth (Height + Width x 2 + Length) exceed 105” will also qualify for this fee.
• Note, UPS has announced that effective April 11th, 2021, Additional Handling charges will differ by zone. We will provide more information about this as it becomes available.
Large Package Surcharge
For domestic shipments, a package is considered a “Large Package” when its length (longest side of the package) plus girth [(2 x width) + (2 x height)] combined exceeds 130 inches or its length exceeds 96 inches.
• Increases $5.00 to $105.00 for Commercial.
• Increases $10.00 to $130.00 for Residential.
UPS Surepost
UPS Surepost rates increase by an average of 4.74% for packages weighing 1-10 lbs in zones 2-8, for which the service is intended.
Area Surcharges – Surepost
For packages delivered to certain Zip Codes within the 48 contiguous states:
• Delivery Area Surcharge applied to residential addresses will increase $0.40 to $2.35.
• Delivery Area Surcharge applied to residential extended addresses will increase $0.50 to $2.95.
Non-Machinable Charge
Applies as follows:
• Any package with one dimension measuring more than 34 inches and not exceeding 48 inches.
• Any package with any two dimensions each measuring more than 17 inches and not exceeding 30 inches.
• Any package weighing over 35 lbs. Rate increases $0.45 to $3.40.
FedEx – Effective January 4th:
Fedex Ground, Home Delivery and Express
FedEx’s general rate increase this year is fairly consistent with previous years as well as with UPS. Ground, Home Delivery and Express will all increase by an average of 4.9%; however, please note that this is an average across all weights and zones. Packages in the 1-5 lb. range will increase by an average of 6.6%, while those of heavier weights will be less.
Accessorial charges are also increasing as follows:
Address Corrections
The Address Correction surcharge will increase $1.00 to $18.00.
Area Surcharges – Ground and Home Delivery
For packages delivered to certain Zip Codes within the 48 contiguous states:
• Delivery Area Surcharge applied to commercial addresses will increase $0.15 to $3.10.
• Delivery Area Surcharge applied to commercial extended addresses will increase $0.25 to $3.70.
• Delivery Area Surcharge applied to residential addresses will increase $0.30 to $4.30.
• Delivery Area Surcharge applied to residential extended addresses will increase $0.50 to $5.90.
• Delivery Area Surcharges will apply to more zip codes than in previous years.
• Delivery Area Surcharges for Air/Express shipments are slightly higher than those of Ground and Home Delivery.
Residential Surcharges
The Residential Surcharge will increase $0.35 to $4.35 for Home Delivery and $0.30 to $4.95 for Air/Express Services.
Additional Handling Surcharges
All three categories of the Additional Handling Surcharge are increasing.
• Weight (Greater than 50 lbs.) will increase by $1.50 to $25.50.
• Packaging will increase by $1.00 to $14.00.
• Dimension will increase by $1.00 to $16.00. The criteria continues to include: Longest side exceeding 48”, Second Longest side exceeding 30”; however, in addition, effective January 18th, a package with its Length plus Girth (Height + Width x 2 + Length) exceed 105” will also qualify for this fee.
• Note, because UPS has announced that effective April 11th, 2021, Additional Handling charges will differ by zone, it is possible that FedEx will follow suit. We will provide more information about this as it becomes available.
Large Package Surcharge
For domestic shipments, a package is considered a “Large Package” when its length (longest side of the package) plus girth [(2 x width) + (2 x height)] combined exceeds 130 inches or its length exceeds 96 inches.
• Increases $5.00 to $105.00 for Commercial.
• Increases $10.00 to $130.00 for Residential.
FedEx Smartpost
FedEx Smartpost rates increase by an average of 5.8% for packages weighing 1-10 lbs in zones 2-8 and 4.82% for packages weighing 11-20 lbs.
Area Surcharges – Smartpost
For packages delivered to certain Zip Codes within the 48 contiguous states:
• Delivery Area Surcharge applied to residential addresses will increase $0.40 to $2.35.
• Delivery Area Surcharge applied to residential extended addresses will increase $0.50 to $2.95.
Non-Machinable Charge
Applies as follows:
• Any package with one dimension measuring more than 34 inches and not exceeding 48 inches.
• Any package with any two dimensions each measuring more than 17 inches and not exceeding 30 inches.
• Any package weighing over 35 lb. Rate increases $0.20 to $3.40.
Effective January 24th:
The USPS has announced that they will be increasing their rates on January 24th. The effect will be seen on services that we contract directly with the USPS (Priority Mail, First Class, and International Services), as well as for discounted services, such as our Under 1 lb. service from UPS, which uses the USPS for final mile delivery.
Priority Mail will increase an average of 3% for packages weighing 1-5 lbs and average of 8.2% for a packages weight 6+ lbs.
First Class Parcel will increase 6% on average.
We will provide additional information once it becomes available.
Tips for Keeping Your Shipping Costs Low:
- Do what you can to keep products and offers under 1 lb. when possible. Less than 1 lb. packages are eligible for the lowest-cost shipping methods.
- Reduce the size of your packaging when possible. Dimensional weight means that larger packages cost more. Also, packages that are deemed too large are subject to additional surcharges, including Additional Handling and Large Package. At a2b, we utilize Cartonization software to help choose the most efficient box size. Some of our facilities are also equipped with box-making machines that will instantly create the “perfect box” for each order.
- Utilize shipping software that will choose the lowest cost shipping method to achieve the transit time goal and avoid unnecessary upgrades to expensive air/express services. a2b’s shipping systems support the use of Rate Shop shipping codes instead of carrier/service-specific shipping codes. For example, if you want the lowest rate, send us R06 as the shipping method and our system will automatically apply the lowest cost service based on weight and zone. Or if you want 2 Day service, use T10. Our system will choose Ground over 2 Day Air most of the time due to our proximity to most consumers, saving you significant cost from unnecessary upgrades to Air/Express services.
- Be sure to fulfill orders from at least two facilities (east/west) if possible. This will reduce both Shipping Zones and Transit Time. a2b operates facilities in both the east and west, which together can reach up to 94% of US households in just 2 days via ground service, and at reduced cost. Our systems automatically choose the optimal location to save costs.
We hope this information is helpful as you plan for 2021. Should you be interested in exploring our fulfillment services, capabilities and potential costs savings, we would be grateful for the opportunity to speak with you!
