Skip to Content

UPS Is About to Get More Expensive

UPS Posts Positive Quarterly Earnings, And Forecasts A Strong Holiday SeasonUPS Posts Positive Quarterly Earnings, And Forecasts A Strong Holiday Season

Better not send any belated Christmas gifts this year.

United Parcel Service announced Thursday it would raise the rates for U.S. ground and air shipping services by an average 4.9% starting Dec. 26.

International shipping rates also rose 4.9%.

For consumers and businesses shipping items over 150 pounds in the U.S., Canada, and Puerto Rico however, the rate hike will come into place much earlier, on Sept. 9.

The price of shipping packages has skyrocketed over the past decade, with the cost of ground shipping for both FedEx (FDX) and UPS (UPS) having grown 79.2%. Air shipping rates have grown 95.5% over the past decade, according to Lojistic, a transportation software provider.

 

UPS has raised rates an average of 3% to 5% annually. Average revenue per package delivered in the U.S. has stalled in recent years, pressured by free shipping options and heavy competition.

FedEx is also expected also announce a shipping rate hike in the neighborhood of 5% later this month, according to a note from Oppenheimer analyst, Scott Schneeberger.

Don’t worry too much about big customers such as Amazon (AMZN) however—they usually manage to negotiate around those rate hikes. The increases usually hit small businesses and individuals the hardest.