If you thought “unprecedented” described the increases we saw from the two major carriers in 2022, this year’s FedEx and UPS GRI will turn that perspective on its head. As businesses of all sizes continue to scramble to find savings to offset the weight of these heavy annual increases, the major parcel carriers have again leveraged their duopoly of the industry and implemented widespread increases. With this new round of changes to shipping costs, Reveel put together another expert team to create a guide and analyze the increased surcharges and rates so you can know exactly what to expect in 2023.
The Biggest Changes from Both Carriers
The GRI FedEx and UPS announcements came at the end September and mid-October, with a variety of surcharge updates and their multi-page rate breakdown documents coming out shortly thereafter. As with statements, PDFs, and interviews released each year, the true financial impact this would have on individual businesses wasn’t quite clear. After our data scientists ran the numbers, we found the actual increase closer to:
FedEx modeled increase 9.1%
UPS modeled increase 10.2%
These jumps are a far cry from the announced 6.9% increase both carriers announced, so let’s take a look at some of the factors contributing to this discrepancy with both FedEx and UPS.
UPS GRI Highlights
The UPS GRI pricing went into effect on December 27, 2022–before the end of the new year–so it’s likely you’ve already seen its impact in your first 2023 shipping invoices. While UPS Air experienced this same 6.9% increase back in 2012, this is the first in recent years that we’ll see this large of a rate increase to UPS Ground services. While oversize packaging and additional handling are likely areas to see the largest service impact, there are a handful of glaring changes our team found will affect the majority of shippers most:
- Most of the familiar surcharges exceed the 6.9% UPS GRI announced, with some increasing 10-20% in some areas
- Peak surcharges are now named “Demand Surcharges” to reflect their new permanency
- Ground minimum packages charges will also increase 7.9% with UPS
GRI FedEx Highlights
We haven’t seen a 6.9% increase in any of the GRI FedEx has announced in the past ten years to either their air or ground service. While this initial increase is by far the highest in recent memory, the new surcharge changes, like higher residential costs and heavier weight shipments of 50 lbs or more, will certainly contribute to much higher shipping costs across industries. While businesses like home goods and auto parts providers can expect the heaviest increases, here are a few key points everyone is likely to experience this year:
- Many of the common surcharge increases greatly exceed the 6.9% GRI FedEx announced
- Packages delivered to certain zip codes will now warrant the new $13.25 remote surcharge
- Longer zones are set to see higher rate increases across the board
- Ground minimum package charges are set to increase by 7.9%
Reveel’s In-Depth FedEx & UPS GRI Analysis
As with their carrier contracts, it’s difficult to fully understand the UPS and FedEx rate changes through their literature and announcements. That’s why, as with each year, the Reveel team digs through the data for you to create a comprehensive that discusses the reality of the new pricing and surcharges and breaks down who will see the most impact. In this year’s guide, you’ll get details on:
- The actual modeled rate increase
- Which industries will be hit the hardest
- Rate increases on common surcharges
- The new peak season surcharge changes
- Methods for forecasting your costs with the higher rates
Once you know how the 2023 GRI of FedEx & UPS will affect your shipping costs, it’s time to put that data to work to help you find the savings you deserve. At Reveel, our Shipping Intelligence Platform was built with A.I. technology and the goal to help companies ship smarter, no matter how much rates change in a given year. If you’re ready to recover credits you’re owed, find areas to save, and negotiate better contracts, contact us to get started today.
The Reveel App uses AI and machine learning to provide an unparalleled look into what’s impacting your bottom line. Through invoice audits, AI and Machine Learning technology, and rate modeling/simulations, you can see the health of your operation and assess pricing changes from parcel carriers like FedEx and UPS. Sign up for a free Reveel account today to see how you can leverage automation to synthesize your data, ship more for less, and reduce the time needed to identify issues and action items.
