Both FedEx & UPS increase rates by 4.9%
Doug Caldwell & Dan Malech, AFMS
Fewer and fewer price differences between the two carriers; UPS & FedEx prices will now be nearly identical for many services
This morning, UPS announced their 2015 UPS rates and for the first time in memory, UPS and FedEx Ground rates will match penny-for-penny for Continental US shipments (up until now, FedEx Ground has always been five cents lower for 71-150 lb shipments).  The big news continues to be the dramatic change in ground dimensional factors that both carries will introduce for 2015. The new UPS rates and DIM changes will be effective on December 29th. FedEx shippers will get a one week reprieve, with their rate and DIM changes effective January 5th. As previously announced in Parcel, the Postal Service will hold off on their annual increase until at least until the second quarter of 2015.  
Accessorial Charges
In the past, a number of the accessorial charges, such as Additional Handling and Address Correction, had varied by a nickel or two between the carriers. For 2015, nearly all of the accessorial charges will be identical for the two carriers. Fuel is the one exception, with FedEx fuel surcharges tending to be one half to one percent lower on both ground and air.

Domestic Express
On the air side, the story is the same: with a very few exceptions, the 2015 domestic express base rates will now be nearly identical. In the past, FedEx Express has priced their base rates were somewhat higher than UPS. However for 2015, The Next Day AM, Next Day PM, 2nd Day AM, and 2nd Day PM rates are nearly identical. In fact, there is not a single weight or zone for those services through 100 lbs that varies by more than 8/10ths of a percent. Over the last few years, UPS has made an effort to lower the gap between it and FedEx on the express front, and that effort is now all but finished. The one exception is 3 day air, where FedEx rates are an average of 19% higher than UPS, and with some weights and zones over 50% higher.    

International Shipments
UPS international increases are somewhat higher than the domestic increases, with some weights and zones up just shy of 10%. However, the rates are all over the board, with South Korea up just 1/10th of 1%, while hotspots such as the Ukraine, Liberia, Iraq and Libya are up over 8%.

Here are the average UPS increases by service:

  • Ground Commercial 6.4% 1-5 lbs zones 2-8 (4.6% overall)
  • Ground Residential 6.5% 1-5 lbs zones 2-8 (4.9% overall)
  • Next Day Air AM: 5.8%
  • Next Day Air Saver PM 6.1%
  • 2 Day AM Air 7.1%
  • 2 Day Air 6.9%
  • 3 Day Select 7.1%
  • Ground Hundredweight 5.3%
  • Air Hundredweight 5.5-7.1%
  • Ground Standard to Canada & Mexico 4.5%
  • International Express OB Lanes:

            * China: 7.5%
            * UK, NL, FR, DE: 7.0%
            * HK, TW, JP, SG: 7.6%
            * KR, TH: 8.5%

  • International Saver OB 4.6%
  • International Expedited OB 4.9% 

For a complete cell by cell analysis of the UPS & FedEx 2015 increases, contact Doug Caldwell
Doug.caldwell@afms.com or 1-800-246-3521

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