Drop Shipping & eCommerce Blog | Doba

What you need to know about 2016's increased shipping rates

Written by Spencer Durrant on January 14, 2016 in Ecommerce News

photo-1421882046699-09a0ff4ffb1b.jpegIn 2016, the three major carriers in the US - FedEx, UPS, and USPS - will all be upping their shipping rates. Some rate hikes have already happened, while others aren't scheduled to happen until later in January. Regardless, you need to be aware of what's coming so you can plan to deal with the increased rates accordingly. 

UPS changes

UPS's changes became effective December 28, 2015, to not impact 2015's holiday sales. According to their website, UPS says the rate hikes are in an effort to support "ongoing expansion and capabilities enhancements."

You can view all the rates for every service UPS offers in the above link, but the following are the ones most pertinent to online retailers:

  • Rates for UPS Ground services and accessorials will increase an average net 4.9%
  • Rates for UPS Air and International services and accessorials will increase an average net 5.2% 
  • Additional handling charges increase $1.50
  • Delivery confirmation charges increase $0.25 
  • Third party billing service increases to 2.5% on the total charges on all packages that are billed to third parties (especially pertinent to merchants who dropship). 
  • Various area surcharges are going up as well, and can be viewed in detail here.

FedEx changes

FedEx has changed rates on FedEx Express, Ground, Home Delivery, SmartPost, and Freight services. 

  • FedEx Ground and Home Delivery standard list rates increased an average of 4.9% 
  • FedEx One Rate pricing has changed
  • SmartPost rates have changed
  • Minimum rates for FedEx Express have changed

To see the complete details of the changes made to FedEx Express, Ground, Home Delivery, SameDay, and Ground Multiweight rates, click here

FedEx also changed their rates for FedEx Retail. They have a Rate Tools application that will allow you see view 2016 FedEx Retail Rates.


USPS's postage rate increases will begin January 17, 2016, for select mail classes and services. However, these rates aren't final and have to be approved by the Postal Regulatory Commission. If approved, the following rates are what retailers can expect to see. 

  • Priority Mail Express will see an average increase of 15.6% in postage rates in 2016. 
  • Priority Mail Express Flat Rate envelopes will see an increase of $2.55. Priority Mail Flat Rate Boxes will be discontinued in 2017. 
  • Priority Mail rates will see an average increase of 9.4%
  • First Class Package Service will see an average increase of 12.8% in 2016
  • Parcel Select will be renamed to Parcel Select Ground in 2016, and rates will see an average increase of 1.9% in 2016. 
  • Critical Mail service will be discontinued once the new rates are implemented in January 2016.

To see more in-depth explanations of rate changes for USPS, click here

These rate changes will affect all retailers, including SMBs and bigger ecommerce sellers alike. Anticipate these changes to help you adapt and quickly evolve your strategy to negate or minimize the effect of the cost increase on your customers. 

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