Meet Sifted at LINK 2024 Learn More

Sifted logo

What’s Next for Shippers: 2024 FedEx & UPS GRI Analysis

by Sifted Team

Oct 23, 2023

6 min read

It’s General Rate Increase (GRI) season once again. In true duopoly fashion, FedEx and UPS have announced the same GRI for 2024 at 5.9%. Down 1% from 2023’s 6.9% increase.

But remember 5.9% is just an average. The impact to your business could be much higher.

Before we dive into the rate details, here are some key takeaways:

  • Both carriers are hitting express over zone 5 the hardest
  • Packages greater than 50 lbs will see the biggest increases

As expected, they are driving home their message that they only want to ship the most profitable packages: Small, lightweight and delivered to urban areas.

SurchargeGRI Percentage
Announced GRI
5.9%
FedEx Residential Delivery Surcharge, Express6%
FedEx Residential Delivery Surcharge, Ground1%
FedEx Additional Handling, Ground & Express18.9%+
FedEx Oversize, Ground & Express18.5%+
UPS Residential Surcharge, Express6%
UPS Residential Surcharge, Ground7.6%
UPS Additional Handling18.2%+
UPS Large Package Surcharges18.5%+

 

2024 UPS GRI

Effective December 27, 2023, here’s a look at UPS base increases and accessorial fees.

Base Rate Increases

Some express services are hovering in the 7% range – well over the 5.9% announced average.

For example, Let’s take a look at a 1lb package shipped in Zone 2 for the following services

UPS Services2022 Rate2023 Rate2024 Rate2023-2024 Increase
UPS® Ground$9.36$10.10$10.705.9%
UPS 3 Day Select®$13.57$14.59$15.254.5%
UPS 2nd Day Air®$21.23$22.82$24.075.5%
UPS 2nd Day Air AM®$23.13$24.95$26.686.9%
UPS Next Day Air Early®$64.50$67.44$70.404.4%
UPS Next Day Air®$34.50$37.44$40.407.9%
UPS Next Day Air Saver®$31.54$34.33$36.797.2%

UPS Additional Handling and Large Packages

Domestic charges are zone-based for additional handling and large packages. Last year, these increases started at 13% and now they start at 18%.

FedEx Surcharges2022 Rate2023 Rate2024 Rate2023-2024 Increase
Additional Handling (Weight)
Zone 2$25.25$29$2919%
Zone 3-4$27.50$31.50$31.5019%
Zone 5+$30.50$33.50$34.5020.3%
Additional Handling (Dimension)
Zone 2$15.75$18.50$2218.9%
Zone 3-4$17.50$20.50$24.5019.5%
Zone 5+$20.50$23.50$28.2520.2%
Additional Handling (Packaging)
Zone 2$14$16.50$19.5018.2%
Zone 3-4$16$19$2321.1%
Zone 5+$17.50$20.50$24.5019.5%
Large Package (Commercial)
Zone 2$110$135$16018.5%
Zone 3-4$120$145$17520.7%
Zone 5+$140$165$19719.7%
Large Package (Residential)
Zone 2$135$160$19018.8%
Zone 3-4$145$179$20520.6%
Zone 5+$165$196$23520.5%

UPS Residential Delivery Surcharge

A key difference in FedEx and UPS increases this year is in this category. UPS increased their residential surcharges/fees by 7.6% for Ground and 6% for Air, while FedEx matched them on Air/Express® at 6%, they only increased their Ground® Residential Fee by 1%. UPS is making it clear that Ground® residential packages aren’t efficient for them.

UPS Residential Surcharage2022 Rate2023 Rate2024 Rate2023-2024 Increase
UPS® Ground$4.85$5.25$5.657.6%
UPS® Air$5.35$5.85$6.206%

UPS Delivery Area Surcharges

UPS Delivery Area Surcharges (DAS) will increase at a minimum of 6.8% for Ground services and up to 5.5% for Air.

UPS Delivery Area Surcharges2022 Rate2023 Rate2024 Rate2023-2024 Increase
UPS® Ground (Commercial)$3.40$3.70$3.956.8%.
UPS® Ground (Residential)$4.80$5.30$5.707.5%
UPS® Air (Commercial)$3.55$3.70$3.956.8%
UPS® Air (Residential)$5.20$5.55$5.855.5%

DAS’s are billed based on which zip codes each package is delivered to. It’s one of those ‘destination-based’ charges, and while you can’t control where your customers want packages shipped, you can make some adjustments on your end to help lower the cost.

 

2024 FedEx GRI

Base Rate Increases

Some express services are hovering in the 7% range – well over the 5.9% announced average.

For example, Let’s take a look at a 1lb package shipped in Zone 2 for the following services

FedEx Services2022 Rate2023 Rate2024 Rate2023-2024 Increase
FedEx Ground® & FedEx
Home Delivery®
$9.36$10.10$10.705.9%
FedEx Express Saver®$19.57$21.03$21.974.5%
FedEx 2 Day®$21.02$22.59$23.835.5%
FedEx 2 Day® AM Package$23.52$25.37$27.126.9%
FedEx Priority Overnight®$34.14$37.04$39.967.9%
FedEx Standard Overnight®$31.22$33.87$36.417.5%

(FedEx) Zone-Based Additional Handling & Oversize Surcharges

If you ship heavy packages, weight and dimensions-based fees are up as much as 21%.

Zone-based charges to calculate additional handling and oversize fees are here to stay. And anything being shipped to zone 7+ or higher will get tacked with charges that pack an extra punch. Zones 7+ will see price increases of 20%.

On average, the Additional Handling Surcharge is going up 19.6%. Oversize fees are up 19.6% for Express/Ground and 20.1% for Home Delivery.

FedEx Surcharges2022 Rate2023 Rate2024 Rate2023-2024 Increase
Additional Handling (Weight)
Zone 2$25.25$29$34.518.9655%
Zone 3-4$27.50$31.50$37.519.04%
Zone 5-6$29.50$33.50$4019.4%
Zone 7+$31.50$36$43.520.83%
Additional Handling (Dimension)
Zone 2$15.75$18.50$2218.91%
Zone 3-4$17.50$20.50$24.519.5%
Zone 5-6$19.50$22.50$2720%
Zone 7+$21.50$25$3020%
Additional Handling (Packaging)
Zone 2$14.00$16.50$19.518.18%
Zone 3-4$16.00$19$2321.05%
Zone 5-6$17.00$20$2420%
Zone 7+$18.00$21$2519%
Oversize (Express/Ground)
Zone 2$110$135$16018.51%
Zone 3-4$120$145$17520.69%
Zone 5-6$135$160$19018.75%
Zone 7+$145$170$20520.59%
Oversize (Home Delivery)
Zone 2$135$160$19018.75%
Zone 3-4$145$170$20520.59%
Zone 5-6$160$190$23021.05%
Zone 7+$170$200$24020%

(FedEx) Residential Delivery Surcharge

The average Residential Delivery Surcharge for FedEx Ground® is lower than the announced average at 1%. But Express shippers aren’t so lucky. They’ll see a 6% increase.

FedEx Residential Delivery Fees2022 Rate2023 Rate2024 Rate2023-2024 Increase
FedEx Ground®$5.20$5.50$5.551%
FedEx Express®$5.30$5.80$6.156%

(FedEx) Delivery Area Surcharges

DAS fees for Express shippers are up 5.3%+. 7.5% for FedEx Ground®.

The 2023 Delivery Area Surcharge Remote Fee® has a massive $14.25 price tag for Ground and Express. $71.25 for Maximum charge with Ground/Express Multiweight Pricing!

FedEx Delivery Area Surcharges2022 Rate2023 Rate2024 Rate2023-2024 Increase
U.S. Express Package Services (Residential)$5.20$5.55$5.855.4%
U.S. Express Package Services (Commercial)$3.55$3.70$3.956.8%
U.S Ground Services (Residential)$4.80$5.30$5.707.5%
Maximum charge with FedEx Express Multiweight Pricing (Commercial)$17.75$18.50$19.756.8%
Maximum charge with FedEx Express Multiweight Pricing (Residential)$26$27.75$29.255.3%
Maximum charge with FedEx Ground Multiweight Pricing (Residential)$24.00$26.50$28.507.5%
Maximum charge with FedEx Ground Multiweight Pricing (Commercial)$17.00$18.50$19.756.8%

 

How to Reduce Your Shipping Costs from the 2024 GRI

Step #1 Get an Accurate Picture of What the GRI Means for You

The 5.9% average general rate increase is just that. General. An average of the rates across the board. So if you’re taking 5.9% and running with it for budgeting, it won’t be accurate. You need to dive into the data to see how the rate hikes will affect your shipping profile.

Start with comparing your current landed cost against your landed cost after the 2024 general rate increases.

This is the total amount it costs to create a product, transport it, and have the customer receive it.

A few essential metrics you need:

  • Average zone
  • Average price/pack
  • Total accessorial charges
  • Shipping charges by service type
  • Spend trends
  • Carrier agreement terms and discounts

These costs add up quickly. Especially when it comes to accessorial charges. For example, with FedEx, to ship a one-pound package express, you could incur base transportation costs, plus:

  • A residential surcharge (6% higher in 2024)
  • A dimensional weight charge (higher than your actual weight charge would be)
  • A delivery area surcharge (5.4% higher in 2024)

Heads up. Your carriers are tracking these metrics and using them to their advantage. They know your profile well and have their own profits in mind.

If you want to ease the blow of these increases, you need to think as the carrier thinks and ship like they want you to ship.

If you’re feeling overwhelmed or crunched for time, you’re not alone. Software like Sifted Logistics Intelligence can model these changes for you.

Step #2 Build a Plan to Minimize Impact

Don’t give carriers the upper hand. While you can’t hide your shipping profile from them, you can use your data to identify inefficiencies and make changes.

View Your Carrier as an Ally during Negotiations

You can work together with your carrier representative to find how you can help them be more efficient so they can help your efficiency in return.Use step #1 to run the numbers and find where the GRI will hit you the hardest. Then identify areas of leverage and negotiate based on your shipping profile.

Analyze Your Carrier Agreement for Hidden Fees and Surcharges. (Read the Fine Print!)

Sift through your agreement to find any minimum spending clauses. You may have negotiated a discount that decreases your shipping costs, but does it offset the deal if there’s a shipping minimum?

Consider Internal Adjustments to Offset Costs

  • Pass additional shipping costs onto your customers
  • Downgrade to cheaper shipping with longer transit times
  • Work with regional carriers and expand your carrier mix
  • Explore other ways to offset surcharges like box optimization or zone skipping
  • Find ways to maximize in-region fulfillment

 

Get Ahead of the GRI Before It Gets Ahead of You

With Sifted Logistics Intelligence, you can analyze exactly how the GRI increases will affect you.

There is an entire dashboard dedicated to doing just that.

To take it a step further, use Sifted decision support tools to run advanced modeling scenarios. It will help you recognize when to:

  • Open a new distribution center
    Your origin optimization has to be a top priority with additional handling and oversize surcharges going zone-based
  • Add regional or LTL carriers to your mix
    You shouldn’t rely solely on UPS and FedEx
  • Re-evaluate appropriate packaging
    Are you getting hit hard with accessorials? Looking at you, large packages.

Don’t let the GRI slow you down – or catapult you deep into the red. Sifted has the insights you need to stay ahead of the carriers and your competition. Request a demo today!

 

Topics

Check out related resources at Sifted.

Meet Sifted at LINK 2024

Meet Sifted at LINK 2024

At the end of February, the top supply chain leaders from some of the nation’s largest retailers will converge in ...
Read More
Parcel Carrier Comparison Guide

Parcel Carrier Comparison Guide

In the intricate landscape of parcel shipping today, shippers navigate a complex web of carriers, each with its ...
Read More
Amazon Shipping, Seller Fulfilled Prime, and More: Matt Snyder’s Insights and Advice to Sellers in 2024

Amazon Shipping, Seller Fulfilled Prime, and More: Matt Snyder’s Insights and Advice to Sellers in 2024

Amazon took the supply chain world by storm in 2023. They announced Amazon Shipping, a FedEx and UPS competitor ...
Read More
2024 Shipping Industry Outlook: Top Trends Driving Down Costs + How to Capitalize

2024 Shipping Industry Outlook: Top Trends Driving Down Costs + How to Capitalize

Over the last few years, soaring shipping costs, unpredictable rate hikes, and a challenging logistical landscape ...
Read More
Sifted Celebrates Achievement as 2023 Top Tech Startup by Food Logistics, Supply & Demand Chain Executive

Sifted Celebrates Achievement as 2023 Top Tech Startup by Food Logistics, Supply & Demand Chain Executive

Kansas City, Mo – Sifted, a leader in Logistics Intelligence, has been recognized as a 2023 Top Tech Startup by ...
Read More
11/27/23 Parcel News Update

11/27/23 Parcel News Update

1. Amazon’s Volumes Surpass FedEx and UPS Amazon delivered more parcels in 2022 than UPS, according to internal ...
Read More
11/20/23 Parcel News Update

11/20/23 Parcel News Update

1. USPS Announces Tentative Rate Increases for 2024 The United States Postal Service has announced rate increases ...
Read More
11/13/23 Parcel News Update

11/13/23 Parcel News Update

1. Experts Share Attention-Grabbing Items from 2024 GRIs Supply Chain Dive interviewed industry experts, including ...
Read More
2023 Holiday Shipping Deadlines

2023 Holiday Shipping Deadlines

It’s the most wonderful time of the year? It will be if your customers receive their orders on time. The major ...
Read More
11/6/23 Parcel News Update

11/6/23 Parcel News Update

1. FedEx Encourages Pilots to Find New Work According to a memo, FedEx Express is “significantly overstaffed” and ...
Read More
10/30/23 Parcel News Update

10/30/23 Parcel News Update

1. UPS Recaptures 40% of Volume Lost to Strike Fears Last week, UPS shared that they lost roughly 1.5 million ...
Read More
What’s Next for Shippers: 2024 FedEx & UPS GRI Analysis

What’s Next for Shippers: 2024 FedEx & UPS GRI Analysis

It’s General Rate Increase (GRI) season once again. In true duopoly fashion, FedEx and UPS have announced the same ...
Read More

Are you an FBM (fulfillment by merchant) Amazon seller?

Check out our Marketplace Intelligence solutions to protect your bottom line.

Shipping Insights & Alerts
Get updates and track the things impacting your business most

Decision Support
See how supply chain adjustments pay off before you pay out

Carrier Management
Streamline how you manage your carrier operations and contracts

Business Automation
Let software do what it does better than people can

Seller Insights
Measure and monitor with confidence.

Sales Visualization
Shed new light on your sales data.

Fee Analyzer
Understand the impact of ever-changing FBA fees.

FBA Audit & Recovery
Secure money you’re owed from Amazon.

Blog
Discover news, tips, and industry best practices

DIM Weight Calculator
See how DIM is impacting you

Podcast
Hear from industry experts on LeaderShipping

Case Studies
Learn how other brands use
Logistics Intelligence

Carbon Calculator
Calculate your CO2 Emissions

Thought Leaders
Meet the people behind the technology

Guides
Download free reports and expert how-tos

Demo
Get a personalized tour of our software

About Sifted
Get to know Logistics Intelligence

Logistics Intelligence
For parcel shippers

Marketplace Intelligence
For Amazon FBA sellers

Let's get you to the right place!

SIFTED DASHBOARDS
For parcel shippers

AMAZON Marketplace Intelligence

Not sure if you have an account? Email [email protected].