“New year, new rates,” say the top three carriers in the U.S. But how significant are the changes, and how will retailers need to adapt to keep up? Read on for all the relevant details. Plus, our tips on pivoting with these new rates.
Shipping rates have arrived from USPS, FedEx and UPS in 2021 already.
While 2020 was certainly a year of exception, the tried and true tradition of yearly rate increases held true. Some of the carriers have updated list rates as a whole, meaning retailers with non-negotiated rates who rely on rate tables will need to make updates.
Luckily, for those with live rates (especially those with negotiated rates), these changes will automatically be factored into existing rating processes. Keep reading to see the highlights of what’s already changed, and what’s going to change very soon.
2021 USPS Rate Changes Take Effect January 24
Live and list rates for USPS are calculated based on zone and weight. For a comprehensive look at 2021 USPS rate changes, visit the Postal Explorer Price Change Index.
Rate increases for retailers who use flat rate boxes are as follows:
| Product | Current | New Rate |
| Small Flat-Rate Box | $8.30 | $8.45 |
| Medium Flat-Rate Box | $15.05 | $15.50 |
| Large Flat Rate-Box | $21.10 | $21.90 |
2021 FedEx Rate Changes
FedEx initiated 2021 rate increases on January 4th. The release put a heavy emphasis on surcharge increases. You’ll find a comprehensive list of 2021 FedEx rate changes, including surcharge and fee updates, via their official website.
Here’s a quick look at some of the highlights:
| Service | Previous Price | Updated Price |
| Handling Fee U.S. Express Package Services, U.S. Ground Services, International Ground Service | $15 per package | $16 per package |
| Residential Delivery Fee U.S. Express Package Services | $4.40 per package | $4.70 per package |
| Address Correction U.S. Express Package Services, U.S. Ground Services, International Ground Service | $17 per correction | $18 per correction |
| Delivery Reattempt Charge U.S. Express Freight | Greater of $67 per shipment or $0.073 per lb. | Greater of $70.50 per shipment or $0.077 per lb. |
| Signature Required U.S. Express Package Services, U.S. Ground Services, International Ground Service | Adult signature $6.35 per package Direct signature $5.25 per package | Adult signature $6.70 per package Direct signature $5.55 per package |
2021 UPS Rate Changes
Unlike its competitors, UPS published their new 2021 rates at the end of 2020. Changes to its services are largely percentage-based. Find a full rundown of 2021 UPS rate changes at UPS.com.
Here are the rate percent increases for 2021:
| Service | Weighted Average Increase |
| UPS Standard® within Canada | 4.5% |
| UPS Standard to the U.S. | 4.0% |
| Small package UPS Air services within Canada | 5.0% |
| Small package UPS Air services to the U.S. | 2.0% |
| Small package UPS Air services to Worldwide destination | 4.0% |
| UPS imports | 4.4% |
| UPS Next Day Air® Freight, UPS 2nd Day Air® Freight and UPS 3-Day Freight® within Canada, and to the U.S. and Puerto Rico | 4.8% |
How Are These 2021 Shipping Rate Changes Reflected at Checkout?
In essence, you’ll need to charge more for shipping to maintain your current margins. But how do you do that without disrupting the process? We’ve got a few solutions.
- Opt for Live Rates
Live rates ease the burden on retailers when updates like these are released by carriers. Using live rates, a carrier’s API will communicate directly with your store to populate the correct rate. You can be sure the rate is up-to-date because it’s coming directly from the carrier itself. You can even pull instant quotes for LTL shipments, eliminating the need to call around to different carriers for quotes. If live rating is a viable option for your store and you’re not already using it, now’s the time to consider switching over. - Add Surcharges
If you’re using table rates instead of live rates, which is necessary for certain retailers or business models, you’ll need to take a close look at your tables. To avoid updating tables across the board, consider adding a surcharge to orders placed using the shipping methods listed above. This is not a long term solution, however, as rates will continue to change. But it may be a good stop-gap to avoid going into the red on shipping.
The ShipperHQ Method
With shipping rates changing constantly, you need a tool you can rely on to keep your rates accurate and relevant. ShipperHQ’s comprehensive Shipping Rate Management Platform lets you make changes to shipping rates, delivery options, surcharges, promotions, and much more instantly. With full customization right at your fingertips, you can align your shipping strategy to your personal business goals and shipping requirements with ease.
It’s important to stay up to date on shipping rate increases, especially as you roll into 2021. While these modest increases shouldn’t have a dramatic impact on your shipping strategy, it’s important to make adjustments if you start to see your bottom line impacted.
Get started by talking with one of our shipping experts today to see how you can maintain your shipping rates with minimal upkeep and maximum flexibility. And check out our 2021 Shipping Strategy Checklist for more tips on taking control of your shipping.
