With a new year comes new rates and products from the top shipping carriers.

UPS Ground® announced an average rate increase (starting December 30, 2013) of 4.9%. FedEx® Ground/Home Delivery announced an average rate increase (starting January 6, 2014) of 3.9%.

Note: Since UPS Ground and FedEx Ground/Home Delivery rates (up to 50 lbs.) are identical in 2014, the annual rate increase percentage is the same for both carriers.

But the devil is in the details as UPS and FexEx publish their annual rate increase using an average rate between 1 lb. and 150 lbs.  While the rate increase in higher weights (example: 100 – 150 lbs.) are below the average, the annual rate increase in the more frequently shipped weights of 1 to 10 lbs. are often much higher than the average — for 2014 they will be 7.52% in the 1-5 lbs. range and 7.06% in the 6-10 lbs. range.

In comparison, the U.S. Postal Service has reduced their overall average rate for Priority Mail by 0.87% in the 1 to 5 lbs. range and by 2.22% in the 6-10 lbs. range.  These new lower Priority Mail rates will start Sunday, January 26, 2014.

As with every annual rate increase, it’s always a good idea to review your shipping program and look for opportunities to lower costs.  With improved package tracking and no fuel surcharges or fees for residential delivery, the USPS is a great option to include in your shipping program for 2014.

Rate Sources:
FedEx 2014 Service Guide – http://www.fedex.com/us/service-guide/our-services/pdf/
UPS 2014 Daily List Rates – http://rates.ups.com/
USPS 2014 Shipping Services Prices – http://pe.usps.com/Shipping_Svcs_Jan_2014.xls

Calculation Method:
For all three shipping carriers, we calculated the difference between the 2013 and 2014 overall shipping rates for the different weight groups (up to 50 lbs.) across shipping zones (1-8).  To determine the shipping rate increase percentages for the different weight groups, we divided each difference by the corresponding 2013 overall shipping rate.  For this comparison, UPS Ground daily rates, FedEx Home Delivery Standard List rates and USPS Priority Mail Commercial Base rates were used.  The shipping rate percentage increase calculation does not incorporate the shipping rates for USPS Zone 9, which will be introduced on January 26, 2014 for U.S. territories.

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