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FedEx, UPS and USPS Shipping Rates are on the Rise

With DHL Express focusing solely on international business, anecdotal evidence is that remaining providers are less inclined to negotiate rate reductions for domestic US shipments, even as they announce increases for the new year.

On January 5 standard list rates for FedEx Ground and FedEx Home Delivery increase by an average of 5.9%, and FedEx Express rates will move up by an average of 6.9% for both domestic and international service. To moderate the FedEx Express increase, the carrier will be adjusting downward by 2% the fuel price at which its surcharge begins.

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FedEx Express is boosting international coverage. Originally scheduled for opening late this year, the start of operations at its new Asia-Pacific Hub at China’s Guangzhou Baiyun International Airport has been moved to the first half of 2009. The new hub is expected to replace the carrier’s present hub in Subic Bay. “The revised operations date provides FedEx with the necessary time to fully test all systems and processes, as well as work closely with the Guangzhou authorities to ensure all necessary approvals are in place,” said the company, adding that there will be no service impact to global customers as a result of the revised operating schedule.

Remarkably similar are rate increases for UPS customers that have been previously announced. Also beginning January 5, UPS Ground rates will climb by an average of 5.9%. UPS Air and international rates will grow by 6.9% to be eased by a 2% reduction in fuel surcharges. Published rates for UPS Freight will also grown by 5.9%. Specifically for its international air business, UPS says that on December 1 it will lower air fuel surcharges from 28.5% to 15%.

Looking to the holiday shipping season, UPS says with the economic slowdown and well publicized slackening of retail sales, it is unable to predict the volume it will handle. That said, the carrier expects the overall busiest day this year will be Thursday, December 18. Its busiest day for handling air packages is anticipated to be December 22. UPS does say that by using its air services, packages may be sent as late as December 23 and be ready for opening on Christmas Day.

The US Postal Service (USPS) is boosting its pricing effective Sunday, January 18, 2008. Specific average price increases are Express Mail up 5.7%, Priority Mail to climb 3/9%, Parcel Select up 5.9%, Parcel Return Service increases 5.3% and International Shipping Services jump 8.5%. In commenting on the changes, Robert Bernstock, president of Mailing and Shipping Services, says, “The new prices are very competitive within the shipping industry and reinforce the value Postal Service pricing offers our customer. As always, the Postal Service does not impose fuel surcharges, hidden surcharges or surcharges for residential delivery or Saturday delivery.”

The withdrawal of DHL Express from US domestic business is hardly going unremarked. For example, Stephen Kearney, USPS senior vice president of Customer Relations, in calling attention to DHL Express leaving the market, said, “In light of ongoing changes in the industry, the Postal Service is open for business and ready to deliver with a full range of competitively-priced shipping products and services. Whether large business customers, small retailers or individuals, USPS can meet America’s shipping needs.”

In a move to capture DHL Express business, Newgistics Inc. announced what it calls a customized program specifically for small parcel residential shippers who will feel the effects of the withdrawal. Newgistics CEO, Bill Razzouk, says the company’s partnership with the USPS will enable it to provide cost effective, six-day per week delivery service for DHL Express customers.

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