Merry rate increases for a joyous new year! Every year, FedEx, UPS, and USPS give the gift of a General Rate Increase (GRI), an average increase that varies based on the services, type of shipment, timeline, and distance. By 2025, the increases come in the form of higher rates, surcharges and fees. According to the carriers, these increases accommodate issues related to congestion, shortages, rising demand, high fuel costs, infrastructure, and inflation. This article breaks down the new small parcel rates and important holiday shipping deadlines.
USPS
According to the United States Postal Service (USPS), “Shipping service prices are increasing by approximately 3.2% for Priority Mail service and Priority Mail Express service, 3.9% for USPS Ground Advantage and 9.2% for Parcel Select.” These increases will take effect on Jan. 19, 2025. Additionally, USPS announced in September that First-Class stamp prices will remain the same at $0.73. These prices reflect a larger 10-year plan known as “Delivering for America” that will keep USPS competitive yet financially sustainable to provide a 6-day national delivery network.
Holiday Deadlines
- Ground Advantage: December 18, or December 16 for Alaska and Hawaii
- First-Class Mail: December 18, or the same deadline for Alaska and Hawaii
- Priority Mail: December 19, or the same deadline for Alaska and Hawaii
- Priority Mail Express: December 21, or December 20 for Alaska and Hawaii
FedEx
Effective Jan. 6, 2025, FedEx will charge a 5.9% increase across all its services. FedEx 2-Day AM and 2-Day delivery will see an increase of just under 7%. It’s no surprise that all shipment increases rise with size, zone, and specialized handling. Zones 6-8 trend higher but not in every shipment category, such as Priority and Standard Overnight, which remain under 6%. Surcharges increase from 9.59% (Dangerous Goods) to 6%.
Holiday Deadlines
- 1Day Freight: December 23
- 2Day Freight: December 20
- 3Day Freight: December 19
- FedEx International Connect Plus: December 17
- FedEx International Economy: December 18
- FedEx International Priority Distribution: December 19
- FedEx International Priority: December 19
- FedEx International First: December 20
- FedEx International Next Flight: December 23
UPS
In typical fashion, the UPS GRI matches FedEx at 5.9%, effective December 23, 2024. For the first time, UPS has introduced a 2% surcharge for customers who pay by credit. They also increased the minimum charge to $11.32 for existing account holders who already receive a volume discount.
Holiday Deadlines
- UPS 3 Day Select: December 19
- UPS 2nd Day Air: December 20
- UPS Next Day Air: December 23
What’s Behind the Numbers
Clearly, USPS is trying to gain market share this year. The agency is fighting to gain stability, as demanded by Congress in the Postal Reform Act of 2022, which emphasized a guarantee to return to a six-day delivery schedule. But, when it comes FedEx and UPS, they have chosen a matched conservative rate that is no different from the increase from 2024. Their track records show that the days of 3-5% increases are no longer an option in today’s ecommerce landscape. But the fact that they held steady with last year’s increase speaks volumes.
As demand grows, it is important for shippers to negotiate rate terms, optimize packages, and take advantage of bulk shipment discounts. Working with a 3PL partner helps to reduce these increases with volume discounts and rate negotiations.
Evans Distribution Systems is a full-service fulfillment provider that can help you reach customer demand. Contact us at sales@evansdist.com or call 1-800-OK-EVANS to speak to an expert today.