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How Much Will Shipping Rates Increase in 2022?

Posted in Shipping on Feb 16, 2022, tagged with commercial shipping

After the last few years, it will likely not come as a surprise that there are some permanent changes to the cost of shipping on deck for 2022. With a rise in demand for online shopping, logistical challenges, backlogs and canal blockages, and the typical increases in the cost of doing business (gas, insurance, higher labor rates), shipping rates are increasing almost entirely across the board this year.

Due to the multiple factors that go into shipping pricing, these increases (and some decreases!) are applied in different ways—often as a percentage increase on a flat rate or other services, surcharges, or additional fees based on each individual shipment’s circumstances. Since that doesn’t exactly clarify the situation, let’s take a closer look at what that means for common shipping providers, including USPS, FedEx, UPS, and consolidated freight.

USPS

According to USPS, the price increases on deck for 2022 are “part of a balanced approach under ‘Delivering for America,’ the Postal Service’s 10-year plan for achieving financial sustainability and service excellence”. The “rate changes will contribute to $40 billion of investments in people, technology, and infrastructure over the next 10 years to modernize and improve the Postal Service’s operations and customer experience”. 

While there are many upcoming alterations to pricing, not all prices will be changing in January. For example, First Class Mail (i.e. letters) will not increase, but going forward will have scheduled annual postage rate increases twice per year in January & July.

The Priority Mail Express Flat Rate pricing changes are:

Priority Mail Express Flat Rate 2021 2022
Small Flat-Rate Box $8.45 $9.45
Medium Flat-Rate Box $15.50 $16.10
Large Flat-Rate Box $21.90 $21.50
APO/FPO Large Flat-Rate Box $20.40 $20.00
Regular Flat-Rate Envelope $7.95 $8.95
Legal Flat-Rate Envelope $8.25 $9.25
Padded Flat-Rate Envelope $8.55 $9.65

Learn more about the changes to USPS pricing in 2022 on Stamps.com or the Postal Service’s Postal Explorer website.

FedEx

FedEx is also raising their prices in order to meet spikes in demand, higher labor rates, and increasing fuel costs. Per their website, there will be price changes to most of their product offerings, as well as some surcharges and fees that will be applied in specific circumstances. 

Effective January 3, 2022:

  • FedEx Express, FedEx Ground, FedEx Ground® Economy, and FedEx Freight rates increased.
  • There were changes to shipping surcharges and fees that may apply to your shipment and affect your total shipping rate.
  • There were changes to the Delivery Area Surcharge ZIP code lists for FedEx Express and FedEx Ground. 

Effective January 17, 2022:

  • FedEx Freight introduced a “No Shipment Tendered” surcharge that applies when a pickup is performed and no shipment is tendered to the carrier.
  • The International Out-of-Delivery-Area Surcharge and International Out-of-Pickup-Area Surcharge rates will be determined based on the corresponding tier of the ZIP code, postal code, or city of the shipment’s origin and/or destination location for International Express Freight and Parcel services.
  • A Delivery and Returns Surcharge will be assessed on packages that are delivered or returned using FedEx Ground Economy services.

Effective January 24, 2022:

  • The Additional Handling Surcharge and Oversize Charge rates for U.S. Express Package Services and U.S. Ground Services will be determined based on the shipment’s zone.

For more information about current rates visit FedEx.

UPS

There are changes coming to UPS pricing as well in order to “help to support ongoing expansion and capability enhancements”. According to UPS, “[t]he impact of these changes on your shipping costs will vary according to your shipping characteristics and the terms of your UPS agreement.” 

Starting December 26, 2021: 

  • The rates for UPS® Ground, UPS Air and International services increased an average net 5.9%.
  • The rates for UPS Air Freight within and between the U.S., Canada, and Puerto Rico increased an average net 5.2%.
  • UPS Retail Rates and rates for UPS Simple Rate shipments have increased.
  • Rates for all UPS SurePost services have increased.

Starting January 2022:

  • The Air Fuel Surcharge will continue to be based on the National Average U.S. Gulf Coast Jet Fuel Price and adjusted weekly.
  • The Ground Fuel Surcharge will continue to be based on the National U.S. Average On-Highway Diesel Fuel Price and adjusted weekly.
  • The list of Zip Codes to which Area Surcharges apply will change.

For more details on their new shipping rates, visit UPS.

Consolidated Freight

According to the Wall Street Journal, “prices have been rising across the freight sector, including in parcel delivery, trucking, ocean shipping and warehousing”, and in December 2021, “domestic shipping rates for moving goods by road and rail in the U.S. [were] up about 23%... from 2020”. Those rates are expected to climb even higher in 2022, with “experts say[ing] companies have little choice other than absorbing the cost or passing it along to their customers.” 

TSI currently has no plans to increase shipping prices. Stay tuned for a statement from TSI CEO Chris Smith. 

Conclusion

While the shipping industry adapts to growing demand and a changing landscape, you can expect increases on most services or surcharges that add to your shipping costs. It typically will not be more than a few dollars tacked on to your shipment, but with the industry in flux, if you want to know exactly how much it will cost you to ship something, you will have to look up the specifics of what you are shipping on provider websites or contact your shipping provider directly. 

Learn more about our commercial and residential shipping services.