It’s likely going to be more expensive to ship goods domestically in 2024 with major delivery providers.

The United States Postal Service (USPS), United Parcel Service (UPS), and FedEx have each announced intentions to increase rates in the new year.

FedEx & UPS

Effective Jan. 1, 2024, FedEx will increase shipping rates by an average of 5.9% for its FedEx Express services for U.S. domestic, U.S. export and U.S. import.

FedEx Ground and Home Delivery will also rise by an average of 5.9%, and FedEx Ground Economy rates will also increase. FedEx Freight rates will go up, on average, by 5.9% to 6.9% depending on the customer’s transportation scale. Among other changes, FedEx is also increasing customs clearance service fees on imports.

“The price adjustments reflect incremental costs associated with the current operating environment, while enabling FedEx to continue investing in service enhancement, fleet maintenance, technology innovations and other areas to serve customers more effectively and efficiently,” FedEx said.

5.9%
Average increase for UPS and FedEx shipping rates in 2024

Matching FedEx’s hike, UPS will increase pricing on its ground, air and international shipping services by an average net of 5.9%. The rate hikes go into effect on Dec. 26, 2023. The list of zip codes in which area surcharges apply is also changing.

“This helps to support ongoing expansion and capability enhancements as we strive to maintain the high service levels you expect from UPS,” the company said of the rate rises.

Both UPS and FedEx noted the rate increases are averages and that particular shipping charges may vary, as they can, for instance, be influenced by agreements a business has with each provider.

The delivery providers also emphasized that the general rate increase average of 5.9% is a percentage point less than the 6.9% jump that went into effect at the start of 2023. Still, some analysts have asserted that fees, surcharges and other factors are likely to increase what shippers pay above the 5.9%.

The Postal Service

Elsewhere, USPS plans to raise mailing services prices by an average of approximately 2% at the start of 2024. This includes a proposed two-cent increase in the price of a First-Class Mail Forever Stamp, from 66 cents to 68 cents.

“As inflationary pressures on operating expenses continue and the effects of a previously defective pricing model are still being felt, these price adjustments are needed to provide the Postal Service with much-needed revenue to achieve…financial stability,” USPS said in a statement.

USPS price increases must be approved by the Postal Regulatory Commission (PRC). It’s widely expected that the PRC will give the hikes the green light.

Holiday-Time Demand Surcharges

The price hikes come as FedEx and UPS have also started implementing what’s commonly known as “peak season” surcharges – which the carriers are now calling “demand surcharges” – to account for costs associated with moving increased volume during the typically busy holiday period.

The charges commonly apply to residential deliveries, so shipping to commercial addresses is one way to avoid them, according to some shipping experts. Still, that may not always be feasible for drop-ship initiatives that promo products pros are undertaking.

As an example of the peak-season levies, FedEx on Oct. 2 started enacting a surcharge of $6.95 on packages that require additional handling for U.S. Express Package Services, U.S. Ground Services and International Ground Service. It will be in effect until Jan. 14.

Among other charges already in play, FedEx will also be instituting a demand surcharge on FedEx Ground Economy Package Services. The fee will be $1.60 per package from Oct. 30 to Nov. 26; $2.60 per package from Nov. 27 to Dec. 10; and $1.60 per package from Dec. 11 to Jan. 14.

UPS is enacting similar surcharges. Qualifying customers, for instance, are subject to a $6.90 additional handling fee per package on services that include U.S. domestic, U.S. import, and U.S. export shipments. That’s in play now and will continue to be until Jan. 13. Also, between Oct. 29 and Jan. 13, qualifying customers can expect to pay a demand surcharge per package that will range from $1.35 to $7.50 on certain UPS Ground Residential, Air Residential and SurePost packages.

No Holiday Surcharges From the Postal Service

Unlike in years past, USPS is not enacting holiday surcharges in 2023. That means no additional fees for residential area delivery, Saturday delivery or minimum volumes, the Postal Service noted.

Earlier this year, the Postal Service launched Ground Advantage – a service that aims to capture market share from UPS and FedEx by transporting packages under 70 pounds for shippers of all sizes, including promo products firms.

“With no holiday surcharges, we are strongly positioned to be America’s most affordable delivery provider this holiday season,” said Postmaster General Louis DeJoy.