Shippers Guide: 2022 Parcel Rates and Surcharges

Jan 18, 2022

6 min read

Budgeting for ‘average’ parcel rate increases is like hoping termites will go away on their own – they’re going to eat away at your bottom line eventually if you don’t protect yourself. 

eCommerce shippers like you should arm your supply chain with the right data to get ahead of carrier surcharges and rate hikes – by understanding which rates have been modified and are most applicable to your shipping business.

Once you identify which parcel charges are relevant to your team, it’s time to strategize. Here’s a recap of the most significant parcel rate increases coming for shippers:

 

Carrier Rate Increases for 2022 

 

FedEx

Beginning Jan. 3rd, 2022, FedEx launched an average general rate increase of 5.9% for all its services. An increase hike not seen in a decade – and yet, the actual impact to shippers is significantly higher.

For example, residential services for FedEx Ground rose 9.01%! FedEx Ground Economy at a minimum of 5% up to 10.8% – so is 5.9% relevant to your shipping business, or do you need to rethink your 2022 budget?

But that’s not the biggest shift from carriers this year.  

 

FedEx’s game changing shift will come in the form of zone based pricing

Effective Jan. 24, FedEx will start calculating additional handling and oversize surcharges based on your shipping zone. If the zone is three or higher, the end price will pack a strong punch. In fact, the rate climbs by at least 10% every two zones, up to zone seven.

Here’s a real-life example: Your 20” x 20” x 25” box will see a 34%+ increase on one additional handling surcharge –  significantly increasing your current parcel spend.

  • Shipping oversized packages? For FedEx Express and Ground, 2022 rates range between $110 to $145 per package depending on the zone. That’s up to a 38.10% increase from the flat rate of $105 in 2021. And if you only budgeted for 5.9% you’ll be in for a shock once your invoice hits.
  • Beware! There is no longer a flat fee for Oversized Home Delivery charges. Not only will they be zone based too, the 2021 standard price of $130 will now increase from 3.85% to 30.77% – shippers like you could be paying up to $170.00 per package. (Did you just clutch your purse?)
  • Another important change shippers should be aware of is that effective Jan. 17, 2022, FedEx will be discharging a Delivery and Returns Surcharge on packages delivered or returned through the FedEx Ground Economy service.

 

UPS

The announced 2022 general rate increase for UPS was also 5.9% – effective Dec. 26th, 2021. (And if you’ve been following along you already know not to take that at face value.)

Just take a look at some of the surcharge changes: 

    • 2021 UPS Ground (Commercial) Rate: $3.10
    • 2022 UPS Ground (Commercial) Rate: $3.40
      • Increase: 9.68%
    • 2021 UPS Ground (Residential) Rate: $4.30
    • 2022 UPS Ground (Residential) Rate: $4.80
      • Increase: 11.62%

 

Additional Handling and Large Packages Were Hit Heavy

UPS once again rolled out their domestic charges to be zone-based for additional handling and large packages – meaning shippers need to be on their toes.

If you’re shipping large packages (when its length plus girth [(2 x width) + (2 x height)] combined exceeds 130 inches or its length exceeds 96 inches) – expect anywhere between an 8%-13.79% increase for all residential. And up to 16% if you have commercial deliveries.

Additional handling for length and width, weight, and packaging will now be 5.20%-9.37% higher in service price. See what we meant when we said to disregard that 5.9% average?

 

Lightweight Shippers – Surcharge Changes

Small packages will also feel some pressure. UPS is raising their minimum charge for 2022 to $9.36 for 2022. Over a 9% increase. And if you have packages under 5lbs, expect a rise in fees by up to 8% to ship those out.

 

Delivery Area Surcharge (DAS)

  • One of the biggest shifts UPS made in 2022 was the DAS charges – based on zipcode. UPS defines it as:A surcharge to each UPS Hundredweight Service shipment delivered to certain ZIP Codes within the 48 contiguous states”
  • Shippers will see an increase of 9.23% to 11.62% For UPS Ground Commercial, the 2022 rate is $3.40. And $4.80 for UPS Ground Residential.

 

USPS

The United States Postal Service was approved for a shipping rate increase effective Jan. 9th, 2022 – and many popular services were impacted. This is a common carrier for eCommerce shippers, and there are some noticeable changes:

    • Priority Mail and Priority Mail Express increased by 3.1%
    • Priority Mail International by 3.7%
    • First Class Package increased 8.8%
    • First Class Package International Service by 4.2%

USPS is deploying more charges in April 2022

Packages with length between 22 and 30 inches will have a $4.00 surcharge. Packages longer than 30 inches will be hit with a $15.00 surcharge.

And there’s a few more changes to package size:

    • Small Flat-Rate Box will increase from $8.45 to $9.45
    • Medium Flat-Rate Box will increase from $15.50 to $16.10
    • Large Flat-Rate Box will increase from $21.90 to $21.50

DHL

Staying in line with other major carriers, DHL has increased their rates by 5.9%. You can find their service guide here – but let’s take a peek at some of the changes that went into effect on January 1st, 2022.

    • Remote Area Pickup and Delivery will increase by 7% from $42.00 per shipment (or $.42 per lb – whichever is greater) to $45.00 per shipment or $0.45 per lb.
    • Residential address is also increasing by over 7% from $4.95 per shipment to $5.30.
    • Address correction and change of billing will increase from $18.00 per shipment to $19.50 per shipment – over an 8% rate increase.

Amazon

While not yet a parcel carrier, Amazon is feeling the pressure as more shippers look toward their fulfillment services. In response, Amazon is hiking up rates starting Jan. 18, 2022 and you can find a full breakdown of core FBA fulfillment fee changes here.


What Can You Do About These 2022 Rate Changes?

Your first step in combating these parcel carrier rate changes is to have not just visibility into your shipping data –  but a full view of every aspect of your shipping profile. Your data holds the answers to:

    1. Which service mix you need to use 
    2. Which line items of your parcel contract to negotiate with your carrier
    3. If you’re using a current service as intended
    4. Parcel spend and where you could be overpaying
    5. If you need to switch to a regional carrier. 

The options for optimization are endless for your supply chain when you can see the big picture of your operations.

Parcel carriers didn’t just raise the prices on your shipping costs out of necessity, they’re reshaping how they want to work with customers, and more importantly, who they want to work with. The results? Online shopping is about to get a lot more expensive, for everyone.


New Year – New ‘Next’ Normal 

What we’re trying to say is don’t get comfortable with these surcharges and the carrier announced ‘average.’ Understand them, roll with them, and stay alert. The market is changing – and carriers are strained. Which inevitably trickles costs down to shippers like you.

If you need help making more sense out of carrier general rate increases for 2022, check out our comprehensive shipping cheat sheet.

Topics: Additional Handling Surcharge, Surcharges
Topics

Check out related resources at Sifted.

Monumental Rate Hikes: 2023 FedEx General Rate Increase (GRI) Analysis

Monumental Rate Hikes: 2023 FedEx General Rate Increase (GRI) Analysis

Another year of record-breaking carrier increases. FedEx just released a 6.9% 2023 General Rate Increase (GRI). ...
Read More >
Improving Inventory Accuracy: It’s Not as Difficult as You Think

Improving Inventory Accuracy: It’s Not as Difficult as You Think

What is inventory accuracy? Inventory accuracy is a metric that shows the difference between the amount of ...
Read More >
Everything You Need to Know About Parcel Shipping vs. Freight Shipping

Everything You Need to Know About Parcel Shipping vs. Freight Shipping

What is the definition of parcel? 59 million parcels are shipped daily in the United States alone, with numerous ...
Read More >
5 Ways Manufacturers Can Future-Proof Their Network for Greater Efficiency

5 Ways Manufacturers Can Future-Proof Their Network for Greater Efficiency

Over the past year, manufacturers’ durable goods shipments have risen by almost 12%, and new orders are up by 11%. ...
Read More >
How Same-day Delivery is Revolutionizing Parcel Logistics

How Same-day Delivery is Revolutionizing Parcel Logistics

Brief History of Parcel Logistics For thousands of years, goods transportation has played an important role in ...
Read More >
7 Parcel Shipping Companies: What’s Best for Your Business?

7 Parcel Shipping Companies: What’s Best for Your Business?

Things to Consider for Parcel Shipping Companies When it comes to selling online, finding the best parcel shipping ...
Read More >
Just How Bad Will 2023 General Rate Increases Be? Here Are Our Top Predictions

Just How Bad Will 2023 General Rate Increases Be? Here Are Our Top Predictions

Inflation, labor shortages, high fuel costs, and unprecedented demand for shipping capacity will all play a role ...
Read More >
When to Use Regional Parcel Carriers

When to Use Regional Parcel Carriers

Disruptions in the Parcel Sector The COVID-19 pandemic led to vast eCommerce supply chain and delivery service ...
Read More >
How Zone Skipping Can Transform Your Parcel Fulfillment Strategy

How Zone Skipping Can Transform Your Parcel Fulfillment Strategy

What is zone skipping? The high shipping cost of cross-country shipping is one of the biggest problems for ...
Read More >
6 Companies Innovating Eco-Friendly Packaging

6 Companies Innovating Eco-Friendly Packaging

What is considered sustainable packaging? Sustainable packaging uses packaging composed of materials that have a ...
Read More >
Everything You Need to Know About 4PLs

Everything You Need to Know About 4PLs

What is fourth-party logistics (4PL)? A 4PL or fourth-party logistics provider also referred to as a lead ...
Read More >
2022 Peak Season Surcharge Guide [FedEx, UPS, USPS, & Amazon]

2022 Peak Season Surcharge Guide [FedEx, UPS, USPS, & Amazon]

Christmas in…September? FedEx is making fast moves this year with their early Peak Season release. Some charges ...
Read More >

How Sifted Works

Connect to
your account

Sync
your data

Power your
dashboards

Get Your Logistics
Intelligence Demo

Strategic ways to prevent loss down the line

Services you could be utilizing right now for savings

Ways to cut material costs without cutting quality

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.

Cost Impact 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

Customer Stories
Learn how other brands use
Logistics Intelligence

Carbon Calculator
Calculate your CO2 Emissions

Guides
Download free reports and expert how-tos

Demo
Get a personalized tour of our software

Logistics Intelligence
For parcel shippers

Marketplace Intelligence
For Amazon FBA sellers