UPS SurePost Enormous Rate Increase in 2025
On December 13, 2024, the Postal Service amended the Mailing Standards of the United States Postal Service, Domestic Mail Manual (DMM) to discontinue dual shipping labels.
That amendment will discontinue Dual Shipping Labels effective January 1, 2025.
As a result, UPS has had to renegotiate its contract with the Postal Service, which is due to expire on December 31, 2024. This has caused the UPS SurePost rate to increase significantly in 2025.
Source: Federal Register: Dual Shipping Labels Discontinued
How does this impact UPS?
When a package is shipped using UPS SurePost, the label includes shipping details for both UPS Ground and USPS parcel services. UPS leverages its technology to determine whether to transfer the package to USPS for final delivery or handle the delivery, depending on the UPS driver’s route that day. This advanced technology allows UPS to route packages based on its network’s most cost-effective delivery option. However, the amendment eliminates this flexibility for UPS.
This change aligns with the recent UPS National Master Agreement, which mandates that UPS drivers deliver a higher percentage of SurePost packages (increasing from 42% to 50%). This shift aims to create thousands of new jobs by redirecting millions of packages to UPS delivery vehicles. However, it will also raise UPS’s operational costs, leading to higher rates to offset the impact.
How does this impact the shipper?
The immediate effect is a rate increase for UPS SurePost and Mail Innovations (MI) services. Furthermore, it could potentially lead to the phased discontinuation of Mail Innovations altogether.
UPS SurePost Enormous Rate Increase will be effective starting January 13, 2025.Highlights of the increase:
* The average increase across all SurePost services is 9.899%
* The Delivery Area Surcharge will increase from $3.80 to $6.15.
61.84% increase in cost
Surcharge now matches Ground.
* The Extended Delivery Area Surcharge will increase from $4.90 to $8.30.69.39% increase in cost
Surcharge now matches Ground.
Recommended course of action for UPS SurePost shippers:
1. Assess the Increase
• Understand the specifics of the increase and analyze how it will impact your cost.
2. Communicate with the Carrier
• Negotiate the increase with your carrier after you have completed your financial analysis.
• Know the specifics of the impact – your carrier will, but will not share.
3. Explore Alternatives
• Reevaluate shipping volume, weight, and destinations to identify cost-saving.
• Request quotes from other carriers to compare costs and services.
• Prioritize what is important to you. Will it be speed, service, price, etc.?
4. Optimize Your Shipping Strategy
• Consolidate smaller shipments to reduce costs if applicable.
• Zone skip using distribution centers closer to customers to reduce zone surcharges.
5. Review Contracts
• Check if the increase aligns with your carrier contract terms.
• Consider renegotiating your contract if the increases are substantial.
6. Leverage Technology
• Utilize shipping software to compare rates, optimize routes, and track shipments.
• Analyze historical shipping data to identify trends and inefficiencies.
7. Adjust Pricing and Policies
• Adjust your customer’s price or introduce surcharges to cover increased shipping costs.
• Update policies for free shipping thresholds or minimum order requirements.
8. Monitor and Plan
• Regularly review shipping expenses to anticipate future increases.
• Build flexibility into your supply chain to adapt quickly to changes.
With the limited time remaining before January 13th, taking action immediately is crucial.We’re here to guide you through all eight recommendations at ebb Logistics. By partnering with us, you’ll receive a tailored action plan that aligns with your company’s unique needs. Plus, we’ll monitor progress with timely reviews to ensure optimal results.
Don’t wait until January to see the impact of new rates on your first bill. Take proactive steps today!
Contact Us
The opinions expressed do not necessarily reflect the views of the Firm, its clients, or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
Discover more from ebb Logistics
Subscribe to get the latest posts sent to your email.
