“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 2023 already.
While the last few years have been an 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.
2023 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 2023 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 | $8.70 |
| Medium Flat-Rate Box | $15.05 | $16.00 |
| Large Flat Rate-Box | $21.10 | $22.50 |
2023 FedEx Rate Changes
FedEx initiated 2023 rate increases on January 4th. The release put a heavy emphasis on surcharge increases. You’ll find a comprehensive list of 2023 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 | $16.50 per package |
| Residential Delivery Fee U.S. Express Package Services | $4.70 per package | $4.90 per package |
| Address Correction U.S. Express Package Services, U.S. Ground Services, International Ground Service | $18 per correction | $18.50 per correction |
| Delivery Reattempt Charge U.S. Express Freight | Greater of $67 per shipment or $0.073 per lb. | Greater of $72.50 per shipment or $0.079 per lb. |
| Signature Required U.S. Express Package Services, U.S. Ground Services, International Ground Service | Adult signature $6.35 per package Direct signature $5.55 per package | Adult signature $6.95 per package Direct signature $5.55 per package |
2023 UPS Rate Changes
Unlike its competitors, UPS published their new 2023 rates at the end of 2022. Changes to its services are largely percentage-based. Find a full rundown of 2023 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% |
Please note prices are accurate at the time of writing and may change on a regular basis. This is meant to be used as a guide and may not be up-to-date and accurate.
How Are These 2023 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 Surcharge
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 2023. 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 2023 Shipping Strategy Checklist for more tips on taking control of your shipping.
FAQs
How have USPS, FedEx, and UPS adjusted their shipping rates for 2023 in response to fuel cost changes?
All three shipping companies have adjusted their rates in response to fluctuating fuel costs. While the specifics of these adjustments vary by company and are often proprietary, it’s safe to say that increases in fuel costs have contributed to higher shipping rates across the board.
What additional or hidden fees should I be aware of for USPS, FedEx, and UPS shipping in 2023?
It’s important to be aware of potential additional costs like residential delivery fees, handling fees, address correction charges, reattempt delivery fees, and signature requirement charges. The rates for these services have increased for FedEx in 2023. Also, UPS adjusts rates percentage-wise, so additional costs can depend on the specifics of the shipment.
Are there any changes to insurance or declared value costs for USPS, FedEx, and UPS in 2023?
While this article doesn’t include specific changes to insurance or declared value costs, shippers should anticipate potential increases in these areas as well. It’s always a good idea to check directly with USPS, FedEx, or UPS for the most up-to-date information on these costs.
How have changes in the global economy impacted shipping rates in 2023?
Global economic changes have indeed impacted shipping rates. Factors such as inflation, changes in labor costs, fluctuations in demand due to the pandemic, and other elements of the global economic climate have played a role in determining shipping rates.
What can retailers do to mitigate the impact of these shipping rate increases?
Retailers might consider strategies such as adjusting prices, absorbing some of the cost increases, negotiating rates with carriers, or exploring other shipping options. Retailers can also use live rates to ensure that they are always working with the most up-to-date costs. Using a tool like ShipperHQ can help retailers manage shipping rates effectively and maintain profitability.
