Everything to know about UPS 2023 shipping rate increases

Like the other major carriers, UPS announced a General Rate Increase for 2023. When the rates change (almost always in an upward direction) it’s time for shippers to get strategic. Some will try to negotiate for discounts; others will adjust their shipping strategies or add more carriers to the mix. Doing nothing simply isn’t an option. Understanding the new UPS rate increase, discovering where the biggest increases are and identifying opportunities for savings is crucial. 

UPS spells out all of the various changes in detail in the 2023 UPS Rate and Service Guide. You can download a pdf from the UPS website, but it is very detailed and more than 150 pages long. Instead, you may want to visit our web page for a brief overview of what’s changed. 

In this article we will summarize the highlights of the UPS 2023 rate increase and explain the ways it is likely to impact your costs. HINT: it’s more than just shipping rates. And because shippers with heavy packages will be among the hardest hit by the increases, you will also find a helpful chart of UPS 2023 shipping rates by weight.

What is the UPS General Rate Increase (GRI)?

The General Rate increase is a yearly event in the shipping industry. Around the end of the third quarter, shipping carriers crunch their numbers, including package volumes, shipping distances and the changing costs for fuel, vehicles, equipment, labor and other operational expenses. Next, they set their profit goals and calculate rates for the coming year. 

The most recent UPS GRI effective date was December 27, 2022. It marked the company’s highest increase to date, but the increase was right in line with that of its primary competitor, FedEx. The published UPS rate increase was 6.9 percent—although some costs, notably fees and surcharges, went up even more. Because carriers impose surcharges on most shipments, these costs can have a significant impact on your bottom line. It’s not unusual for surcharges to comprise 30 to 40 percent of shipping costs.

2023 UPS shipping rate changes highlights

What can shippers expect from the UPS 2023 rate increase? First, the GRI is more complicated than it appears. If you think that the 6.9 percent increase applies across the board, you’re in for a surprise. In fact, 6.9 percent is the average increase. Rates for most UPS services, including UPS Ground, UPS 3 Day Select, UPS 2nd Day Air and UPS Next Day Air Saver are increasing by more than seven percent. Expect the biggest increases on larger packages, longer distances and fees and surcharges that make it difficult to keep costs down. Other changes include:

• Higher package minimums: The lowest price that UPS will charge to ship a package increased to more than $10 for the first time.
• Hefty fees for additional handling: Charges for overweight and oversize packages or non-standard packaging rose by as much as 23 percent.
• Larger surcharges for large packages: The large package surcharge for Zone 2 deliveries rose from $135 to $160 – and 18.5 percent increase.
• Larger increases for higher zones: The average increase for packages shipping to Zones 4 or below is 6.6 percent, but for packages shipping to Zones 5 or above the average increase is 8.7 percent. For example, zone increases for UPS 2nd Day Air and UPS 3 Day Select can be as high as 9.86% or 11.90% respectively.Larger surcharges for large packages: The large package surcharge for Zone 2 deliveries rose from $135 to $160 – and 18.5 percent increase.
• Address correction: Fees rose from $18 to $19.50, an increase of 8.3 percent.
• Residential deliveries cost more: Ground residential and delivery area surcharges, which are often both applied to residential shipments,  went up 8.2 percent and 10.4 percent respectively.

For complete information on how the price increases affect your shipments, refer to the UPS 2023 Rate and Service Guide.

2023 UPS surcharges for larger packages

Companies that ship a lot of large packages may experience a bit of sticker shock in 2023. The reason: UPS is working to make operations more efficient, and one of their strategies is to charge more for shipments that are difficult to handle, such as large packages. Packages that are too large to be sorted by machine add extra labor costs – and UPS needs to recoup these costs in order to maintain profits. Large packages also take up more cargo space, and if they are also heavy, they require more fuel to transport. As a result, UPS large package surcharges saw double digit increases in 2023.

Here's what you need to know when shipping large packages via UPS. First of all, large packages are subject to a minimum billable weight of 90lbs. UPS Ground and Freight services are the only exceptions to this rule. Secondly, UPS will impose a large package surcharge on domestic shipments if the length (the longest side of the package) plus the girth (width x 2 plus height x 2) is more than 130 inches, or if the package length is more than 96 inches. For international shipments, only the length plus girth measurement applies. The good news: UPS will not add an Additional Handling charge when the Large Package surcharge is applied.

But what if your package exceeds the UPS maximum limits for weight and dimensions? In that case, your best bet is to ship via freight. In fact, UPS will almost certainly refuse a package that is over maximum. In the rare event that UPS discovers an over maximum limit package in its system, the company may impose a very steep Over Maximum Limits surcharge in excess of $1,000, or return it at the sender’s expense.

2023 UPS surcharges for common fees

Fees and surcharges are a fact of life in the shipping business. Many of the UPS 2023 surcharges are different than last year’s, so it’s a good idea to understand how they work and develop strategies to minimize them. It’s not unusual for surcharges and fees to increase the total shipping cost by as much as 40 percent.

Fortunately, some UPS fees are easy to avoid. The address correction fee, which increased more than 8 percent in 2023, is imposed when the carrier discovers that either the address on a package is incorrect or the recipient has moved. These errors can be caused by something as simple as a mis-spelled street name, extra spaces in the address or use of non-standard USPS abbreviations, such as “Av.” instead of “Ave.” for “Avenue.” The late payment fee, which adds another 8 percent to the entire invoice, can be avoided by paying close attention to payment terms and scheduling payments accordingly.

On the other hand, some UPS 2023 surcharges may be more difficult to avoid. If you ship to residential customers, you will be charged as much as $5.85 on top of the basic rates because delivery to homes involves more frequent stops over a wider area as opposed to commercial deliveries that tend to be more concentrated in a single area. In some cases, you may be able to avoid the residential delivery surcharge by using a flat rate service such as UPS Simple Rate.

Other UPS delivery area surcharges are less obvious and therefore much harder to avoid. This is especially true in 2023, because UPS has made many changes to the list of ZIP codes for zones in the contiguous 48 states. Roughly two percent of ZIP codes are affected by these changes. You can expect to see increased costs when shipping to 578 ZIP codes, but costs will decrease somewhat for 199 ZIP codes.

Finally, UPS has changed peak surcharges (which applied only in times of surging demand for shipping services, such as before major holidays) to demand surcharges. Demand surcharges are more complex. They apply to shipments to and from various zones, packages that require additional handling, or to shippers whose volume exceeds certain limitations per week. UPS demand surcharges may apply for a specific period or remain in place until further notice. The company recommends checking the UPS website for any peak surcharges before you ship. 

2023 UPS shipping rates by weight chart

More than ever in 2023 it pays to watch your weight. It may be just one of the factors that impact shipping costs, but it is an important one. As the chart below illustrates, cost rises significantly as weight goes up. For a comprehensive price list by service, weight and zone, download the UPS Rate and Service Guide.

Packages can weigh up to 150 pounds, but packages over 50 pounds are subject to an additional handling surcharge of between $29.00 and $34.50 per package, depending on the destination zone.In addition, you will be required to attach a sticker to all packages weighing more than 70 pounds. 

Weight also affects packaging requirements. It’s important to be sure that your packaging materials are sufficiently durable to protect and support the product throughout the harsh conditions of the shipping process.

How can you prepare to save on shipping and mailing costs in 2023?

Despite the hefty increases to UPS rates, there are opportunities to save on shipping in 2023. But you can spend a lot of time and energy trying to find them on your own. And there’s no need to, because Pitney Bowes has done all the hard work for you, and negotiated deep discounts on rates that you won’t find anywhere else. 

Our powerful PitneyShip software makes it easy to find the best combination of rates and delivery logistics for every package you ship. In just a few clicks you can compare prices from major carriers and see any surcharges and fees that may apply, so you always know the full cost before you decide to ship. 

Besides discounted rates on every package, First Class letter or Priority Mail shipment you send, you get automatic address verification to eliminate the cost of redeliveries. Plus, you have full visibility into all shipping and mailing activity across your business, so you can analyze trends and set rules to prevent overspending.