Shipping Rate Alert: 2024 Price Increases & How Rush Order's 3PL Services Can Help
In light of the upcoming 2024 General Rate Increases (GRIs) by FedEx, UPS, OnTrac, USPS, and other carriers around the world, it is crucial for shippers to be well-informed and prepared. Understanding these changes is key to effective business planning and maintaining margins in the coming year.
Summary of 2024 Increases
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5.9% on Average - Higher for some services and lower for others.
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5.9% for most / all services
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5.9% on Average - Higher for some services and lower for others.
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5.4% - 5.9% for commonly used e-commerce service levels.
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TBD - Check back for an announcment by mid / late December of 2023.
2024 FedEx and UPS Rate Increases
Both FedEx and UPS have announced a 5.9% increase in their 2024 GRIs. This uniformity in rate hikes is a continuation of their historically similar pricing strategies. For UPS, the new rates will be effective from December 26, 2023, a week earlier than FedEx's rates which commence on January 1, 2024.
The 5.9% rate increase is an average figure encompassing a range of available shipping options. In other words, this percentage does not apply uniformly across all services but varies depending on the specific service type and characteristics of the shipment.
For instance, while some services may see increases close to or at the 5.9% mark, others might experience higher rate hikes. This variation is particularly evident in the case of expedited services such as next-day air, which are expected to see increases of up to 8%. The rate changes also differ across various weight brackets and shipping zones. Lighter shipments and shorter-haul deliveries might see smaller increases, whereas heavier packages and longer distance shipments could face higher rate adjustments.
Moreover, the actual impact of these increases on individual shippers will depend on their specific shipping profiles and negotiated terms with the carriers. Discounts, surcharges, and other contractual elements will play a significant role in determining the net increase in shipping costs for each shipper. Thus, while 5.9% serves as a general indicator of the rate increase trend for 2024, the actual impact on shipping costs will be more complex and varied across different shipment types and customer agreements.
Key Takeaways:
Similarity in Surcharges: Many of the delivery surcharges between FedEx and UPS are identical. Of the 40 surcharges we identified and regularly track, 24 are the same for both carriers in 2024.
Impact on Various Services: Rates for services like next-day air, two-day, and three-day services by FedEx and UPS are expected to climb by as much as 8%.
Minimum Charges: Both carriers are implementing higher minimum charges for their services. This is significant for shippers with existing discounts as these minimum charges protect the carriers from deep discount impacts. Minimums are negotiable with both carriers though.
Surcharges Increase More Than GRIs: Common surcharges are set to increase significantly more than the 5.9% GRI, which could heavily impact overall shipping costs for certain shipment characteristics.
OnTrac Rate Increases
Following the trend, OnTrac, a popular regional carrier servicing 36 US states, also announced a rate increase of 5.9% for 2024.
USPS Rate Increases
The U.S. Postal Service (USPS) has proposed price increases for its shipping services to take effect on January 21, 2024. The increases are as follows:
USPS Ground Advantage: 5.4%
Priority Mail service: 5.7%
Priority Mail Express service: 5.9%
An important distinction for USPS is its upfront pricing policy, which excludes additional surcharges for residential and regular Saturday delivery, or fuel, offering a potentially effective solution.
How Rush Order Can Help
As a leading 3PL provider, Rush Order is well-positioned to assist businesses in navigating these rate increases. Our expertise in logistics and our aggregated shipping volume enables us to secure volume discounts, which can significantly mitigate the impact of these GRIs on our clients. Our role is not just to provide logistic solutions but also to ensure our clients' shipping costs remain as economical as possible, even in the face of industry-wide rate hikes.
Parting Thoughts
In summary, while the rate increases across major carriers in 2024 are significant, Rush Order's role as a 3PL provider becomes even more crucial. By offering volume discounts and personalized logistic solutions, we help our clients navigate these changes effectively, ensuring their shipping needs are met in the most cost-efficient manner possible.
Contact us today for a free consultation to see if we can help you save money on shipping costs.
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