UPS Announces Additional Rate Changes for 2017

Source: UPS / www.ups.com / November 22nd, 2016

As no surprise to those of us in the shipping industry dealing with the duopoly of UPS and FedEx, UPS has announced changes to their rates effective December 26th, 2016 in efforts to coincide with the previously announced dim weight, over maximum, and fuel surcharge changes made by FedEx.

Dim Weight Changes for 2017

Effective January 8th, 2016, UPS has reduced its dim weight divisor from 166 to 139 for all parcels.  One caveat that is different from FedEx is that UPS will not impose a dim weight surcharge for domestic ground and air packages less than 1728 cubic inches (LxWxH) or 1 cubic foot.

"Over Maximum" Fees Raised

This is a very important factor to consider when evaluating your shipping costs for 2017 as this is not a minimal "up charge".  In 2016, the fee for packages that exceeded UPS weight and size limits would be charged an Additional Handling Fee of $110.00.  Starting January 8th, 2017, UPS has increased this fee to $150.00 if the package is shipped within the parcel system and not via UPS Freight.

Fuel Surcharge Calculation Changes

UPS will change its Fuel Surcharge Calcuations on a weekly basis starting February 6th, 2017 to match the change from FedEx.  Both were previously a monthly change.  This increases the complexity and work required by shipping departments to figure out shipping costs.  To add fuel to the fire, UPS will now have additional fuel surcharge tables to evaluate.  They originally had ground index separate from air and international, but will begin separateing import and export tables in 2017.

This is typical of historical rate increases in years past.  Generally speaking, FedEx and UPS will announce rate increases and changes that mimic each other.  Being a duopoly in the shipping industry they continue to leverage increases that promote bottom line profits for the carriers.  It is more important than ever to insure you are on top of increases, contract negotiations, and auditing your carrier invoices for discrepancies.

For additional information pertaining to the UPS increases announced on Friday, November 18th, please contact us at any time or see the rate sheets by UPS HERE!

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