UPS set to match FedEx with a 4.9% price increase in North America

UPS set to match FedEx with a 4.9% price increase in North America

UPS has announced plans to match rival FedEx in implementing a 4.9% price increase for its 2015 rates in North America. UPS said its UPS Ground, Air, International services as well as UPS Freight and UPS air freight rates within and between the US, Canada and Puerto Rico will increase by an average of 4.9%.

The price changes will take effect from December 29, 2014.

Rivals FedEx announced a 4.9% price increase last month, which will take effect from 5 January 2015.

This year will also see both UPS and FedEx introducing dimensional weight pricing as they both seek to improve profit margins for the growth being seen in lightweight e-commerce parcels.

Dimensional weight

UPS first announced back in June that it will be applying dimensional weight pricing for all UPS Ground packages and UPS Standard to Canada packages. Dim-weight pricing is already applied to UPS air services, both domestic and international, as well as UPS Standard to Mexico and for packages larger than three cubic feet in size going via UPS Ground or UPS Standard to Canada.

The new UPS pricing system will also take effect from 29 December 2014.

FedEx first announced back in May that it will apply dimensional weight pricing to all FedEx Ground shipments from 5 January 2015.

The UPS and FedEx ground shipment price increases within the United States come alongside a lowering of Priority Mail prices at the US Postal Service for certain parcel categories popular with e-commerce customers, as USPS seeks to gain market share in e-commerce delivery.

Both UPS and FedEx, which use the US Postal Service for last mile delivery of some of their e-commerce parcels, complained to regulators at the USPS plan to lower its prices, suggesting it would affect competing service providers and the market as a whole “substantially”.

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