What You Need to Know About GRI 2021
UPS and FedEx have announced their general rate increases for 2021. These rate changes will affect shippers differently based on their shipping profile and needs, so we compiled a list of key takeaways as the increases approach.
UPS General Rate Increase 2021 Takeaways
Prices for UPS Ground, Air and International services will increase by an average 4.9% beginning Dec. 27, 2020. This matches the UPS 2019-2020 average price increase, as well as the FedEx 2021 GRI.
Largest Increase to Lightest Packages
UPS continues to focus on boosting margins for low-weight shipments, allocating the largest price increases to the lightest packages (i.e., 1-5 lbs.) across most service levels.
Source: UPS
Higher Zone vs. Lower Zone
Higher zone air services will absorb larger increases than ground and lower air zones.
Price Minimums Increasing
Price minimums are going up the most for the slowest services. Continuing its focus on margin improvements for low-weight ground packages, UPS has increased the minimum charge on ground packages by 6.4%.
2021 UPS Minimum Increases
| Service | 2020 Min Charge | 2021 Min Charge | % Increase |
|---|---|---|---|
| 3 Day | $11.67 | $12.35 | 5.83% |
| 2 Day | $19.30 | $20.24 | 4.87% |
| Next Day Air Saver | $28.39 | $29.35 | 3.38% |
| Next Day Air | $30.62 | $32.09 | 4.80% |
| Ground | $8.23 | $8.76 | 6.44% |
| SurePost>1lb | $8.64 | $9.32 | 7.87% |
| SurePost<1lb | $8.58 | $8.82 | 2.80% |
DAS ZIP Code Changes
Delivery Area Surcharge (DAS) ZIP code changes: more ZIP codes than ever will be eligible for DAS surcharges.
Delivery Area Surcharge (DAS) Summary of 2021 Zip Code Changes
(Effective December 27, 2020)
| Added to DAS | 711 |
| Added to DAS Extended | 515 |
| Moved from DAS to DAS Extended | 121 |
| Moved from DAS Extended to DAS | 1,082 |
| Removed from DAS | 433 |
| Removed from DAS Extended | 9 |
Source: UPS
Effects on Larger Packages
With respect to surcharges, UPS continues to crack down on undesirable larger packages.
Effective January 10, 2021, an additional handling charge will be applied to any package with its length plus girth combined exceeding 105 inches.
Effective April 11, 2021, additional handling and large package surcharge rates for non-hundredweight service packages will differ by zone. This will apply to hundredweight service packages effective July 11, 2021.*
* Details on zone-based pricing for these surcharges have not yet been published.
Surcharge Increases
Nearly all surcharges are increasing by more than 4.9%.
| UPS 2021 Surcharge Increases (Effective December 27, 2020) |
|||
| Surcharge | 2020 Rate | 2021 Rate | % Increase |
|---|---|---|---|
| Additional Handling (Lowered from 70 lbs to 50 lbs) | |||
| Additional Handling, Weight | $24.00 | $25.50 | 6.25% |
| Additional Handling, Length/Width | $15.00 | $16.00 | 6.67% |
| Additional Handling, Packaging | $15.00 | $15.25 | 1.67% |
| Address Correction | $17.00 | $18.00 | 5.88% |
| COD | $15.50 | $16.50 | 6.45% |
| Dangerous Goods (Hazardous Materials) | |||
| Hazardous Materials, Air, Accessible goods | $105.00 | $115.00 | 9.52% |
| Hazardous Materials, Air, Inaccessible goods | $51.50 | $54.50 | 5.83% |
| Hazardous Materials, Ground | $37.00 | $39.00 | 5.41% |
| Delivery Area Surcharge | |||
| Delivery Area Surcharge, Commercial Air | $3.10 | $3.25 | 4.84% |
| Delivery Area Surcharge, Commercial Air Extended | $3.60 | $3.85 | 6.94% |
| Delivery Area Surcharge, Commercial Ground | $2.95 | $3.10 | 5.08% |
| Delivery Area Surcharge, Commercial Ground Extended | $3.45 | $3.70 | 7.25% |
| Delivery Area Surcharge, Residential Ground | $4.00 | $4.30 | 7.50% |
| Delivery Area Surcharge, Residential Ground Extended | $5.40 | $5.90 | 9.26% |
| Delivery Area Surcharge, Residential Air | $4.40 | $4.70 | 6.82% |
| Delivery Area Surcharge, Residential Air Extended | $5.40 | $5.90 | 9.26% |
| Delivery Confirmation | |||
| Delivery Confirmation Signature Required | $5.25 | $5.55 | 5.71% |
| Delivery Confirmation Signature Required Adult | $6.35 | $6.70 | 5.51% |
| Dry Ice | $5.85 | $6.15 | 5.13% |
| Large Package Surcharge | |||
| Large Package Surcharge, Commercial | $100.00 | $105.00 | 5.00% |
| Large Package Surcharge, Residential | $120.00 | $130.00 | 8.33% |
| International | $100.00 | $105.00 | 5.00% |
| Over Maximum Limits | $875.00 | $920.00 | 5.14% |
| Rebill Fee (per request) | $17.00 | $18.00 | 100.00% |
| Residential Surcharge | |||
| Residential Surcharge, Ground | $4.10 | $4.45 | 8.54% |
| Residential Surcharge, Air | $4.70 | $5.00 | 6.38% |
| Daily Pickup | |||
| Ground Weekly Pick Up (<$75/week) | $31.00 | $33.00 | 6.45% |
| Ground Weekly Pick Up (>$75/week) | $15.50 | $16.50 | 6.45% |
| Print Return Label, US Express and Ground | $1.05 | -100.00% | |
| SmartPost | |||
| Delivery Area Surcharge, SmartPost | $1.95 | -100.00% | |
| Delivery Area Surcharge, Extended, SmartPost | $2.45 | -100.00% | |
| Non-Machinable, SmartPost | $2.95 | -100.00% | |
Source: UPS
FedEx General Rate Increase 2021 Takeaways
FedEx announced its general rate increase, effective on January 4, 2021. Shipping rates for FedEx Express (Domestic, US Export and US Import), FedEx Ground and FedEx Home Delivery will increase an average of 4.9%. FedEx Freight will increase rates by an average of 5.9%. FedEx SmartPost®, Ground Multiweight, International Premium, FedEx One Rate and Retail Rates will also change, but this has not yet been announced.
The GRI will affect some shippers more than others. If you’re a shipper that sometimes pays late; ships large packages, low weight ground or ground residential, 2- or 3- day express, long-zone express; or incurs a large amount of accessorial charges (as a percentage of overall spend), it is likely that you will be subject to an increase much larger than 4.9%. As is the case annually with rate increases, it is vital to understand how all the combined changes will impact your individual characteristics and ultimately your overall shipping costs.
Here are the main takeaways when planning 2021.
New Late Fees
New for 2021, FedEx will charge 6% late payment fees.
A 6% fee is commensurate with current UPS late payment fees. Shippers that have trouble paying within the standard 15-day window should negotiate longer terms. FedEx has often touted their lack of late payment fees, so shippers used to paying a few days late could face unwanted new charges. It is now more important than ever for shippers to utilize freight audit and payment providers to avoid late payment fees.
Higher Prices for Lightest Shipments
Relative to last year, FedEx will raise prices of the lightest shipments (i.e., 1-5 lbs.) proportionally more than those of heavier shipments.
Source: FedEx
Ground Minimum Increases
The ground minimum package charge (zone 2, 1-pound list rate) has increased by 6.44% to $8.76.
Low-weight ground packages are a point of emphasis this year for FedEx, with greater than 6% increases for the 1- to 5-pound weight bucket. Increases will be different based on negotiated minimum charges and discounts.
Increases for 2-day, 3-day Shipments
2-day and 3-day shipments will feature larger price increases.
This is likely due to the “Amazon® effect.” FedEx knows that shippers need to compete with faster shipping from Amazon and want to be compensated when shippers need faster-than-ground (but not overnight) express services.
Express Service Changes
Longer zones will take on larger price increases than shorter zones for express services.
This trend continues from last year and will generally affect shippers with one coastal distribution center more significantly.
Source: FedEx
Items with Higher-than-Average Increases
Surcharges have increased by more than the announced 4.9% for most of the high-frequency items, and Delivery Areas Surcharge (DAS) ZIP codes have changed.
More ZIP codes are considered standard DAS and fewer are considered extended DAS compared to 2020. View the full list of ZIP codes.
Additionally, as of January 18, 2021, other surcharge ratings will occur:
FedEx Freight will introduce a high-cost service area surcharge, which will apply to shipments not rated on FXF PZONE/EZONE or FXF 1000/501, for corresponding (yet to be released) ZIP codes.
International out-of-delivery-area and international out-of-pickup-area will be assessed based on ZIP codes from the list.
Effective February 1, 2021, a freight fuel surcharge will be assessed on the per-pound rated weight of the shipment. Find a preview of the new table.
