USPS, UPS & FedEx Shipping Cost Increase for 2022.
Will shipping costs and postage rates increase for packages and direct mail in 2022?
The short answer is yes! All of these major carriers increase their shipping rates each and every year for their package delivery. But this year, it would appear that their shipping cost and rates might increase more than usual. The simple answer is higher than normal payroll costs, fuel costs, and shortages are contributing factors. So just how much will these shipping rates increase. Well, that’s anyone’s guess, but here’s what we do know.
As always, regardless of shipping rate increases, there are methods to achieve reduced shipping rates. Some of these shipping or mailing discounting strategies include shipping and postage software, negotiated rates with private carriers for volume users, and understanding postal regulations and services levels.
While these methods of reducing your cost can be challenging, aligning yourself with a professional fulfillment service provider make it possible.
The United States Postal Service (USPS) will typically raise rates for Market Dominant services twice a year in January and July. That does not mean that all service levels or mail categories will increase, but certain ones will. On occasion, the USPS will increase almost all rates, but they typically focus on specific categories.
Both UPS & FedEx costs mirror each other. more or less And while their average increase is approximately 4.9% per year, for 2022 both carriers are estimating a 5.9% increase. However, 5.9% is not a good budget number as some rates have already increased beyond that. Shipping cost Increases are dependent on many factors, some of which are shipping zones’ package weight and package dimensions. See the industry forecast below:
Package dimension related to dim weight pricing is probably the most significant increase in shipping cost and has nothing to do with rate increases. Dims happen when your packaging or box is larger than what the carriers believe its contents inside should weigh. For instance, you could have a shipping box that is 10 X 16 X 10 with an actual shipping weight is only a few pounds, but the Dim pricing might be 15 pounds. These formulas can also be negotiated by commercial users of these carrier services which can help reduce these Dim Weight charges. Look at the DIM Weight examples below:
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