New shipping rates are coming in January 2022 by all major carriers. UPS already implemented some rate changes this week.
Unlike the holiday season of 2020, this season wasn’t plagued by major shipping chaos, as carriers were better prepared to avoid bottlenecks and delivered most gifts on time. All major logistics carriers spent a lot of money improving their logistics network infrastructure and started recruiting seasonal workers earlier.
Still, 2021 was somewhat different as consumers opted to shop earlier and found more empty shelves in retail stores and out-of-stock messages in online stores due to Supply Chain issues. Not having a major weather event that affected a large part of the US during this season also helped keep parcels moving.
We can only hope that next year, it will be even smoother with fewer supply chain issues making the news and more consumers finding gifts they want to give.
Heading into 2022, we asked 26 industry experts what online merchants and marketplace sellers should expect. We hope you will check our annual feature providing great insights that we think can help you find new opportunities and fine-tune your business next year.
Meanwhile, we also enter 2022 with a number of already announced price increases. Here is a brief rundown on what to expect over the next few weeks.
Shipping Rate Increases by Carrier
USPS: The Postal Regulatory Commissions (PRC) approved the US Postal Service’s request to increase rates effective January 9, 2022, which includes most popular shipping services used by online merchants and marketplace sellers.
- Priority Mail and Priority Mail Express will increase on average 3.1%
- First Class Package will increase on average 8.8%
- Priority Mail International will increase on average 3.7%
- First Class Package International Service will increase on average 4.2%
The USPS did delay the implementation of new Non-Standard Fees and Dimension Noncompliance fees until April 3, 2022. Those were originally supposed to go into effect on January 9 as well.
UPS: Published rates for UPS Ground and UPS Air services increased an average of 5.9%. This adjustment already went into effect on Sunday, December 26, 2021. New rates for Value-Added Services and Other Charges also already went into effect this week as well.
On January 9, 2022, UPS will also be adding new extended area surcharges that are in addition to the price increases from this week.
FedEx: On January 3, 2022. FedEx will increase FedEx Ground, FedEx Express, and FedEx Home Delivery services on average 5.9%.
FedEx Ground Economy (formerly FedEx SmartPost) will increase an average of 6.9% next week as well.
Later in January, FedEx will increase shipping rates for several other services included FedEx Freight, International Out-of-Delivery-Area Surcharges, Delivery and Returns surcharges, and also additional handling and oversize surcharges.
DHL: On January 1, 2022, DHL Express will increase published rates on average 5.9%. The carrier said some optional services and surcharges will increase as well.
Sendle: The popular shipping upstart relies heavily on USPS, but also has agreements with regional carriers. Currently, Sendle has not announced any rate increases, but last year, it raised rates in early February in response to USPS rate adjustments. Stay tuned.
Amazon: While not really a parcel carrier (yet), its fulfillment service is very popular with merchants, including those that do not sell on the Amazon marketplace. On January 18, Amazon will raise a number of its fulfillment fees which are technically not shipping rates as it includes storage but will have a similar effect on merchants.
January is Best Time to Review Shipping Rate Increases
While none of these rate increases are much of a surprise at this time of the year, for merchants that have to offer free shipping to be competitive in their categories, costs will go up in January.
The “nasty surprises” will come with oversize, heavy, and odd-sized boxes and deliveries to remote locations. Carriers are hiding the biggest increases in these surcharges.
Now is a good time to review your products, shipping box sizes, and consider some alternative carriers. If you still rely only on one shipping service, you may want to look at other carriers.
Most carrier rate tables have some “sweet spots” for certain sizes and weights that could help you reduce your shipping expenses. If your volume is moderate to high, you may be able to negotiate better rates for your most popular box sizes and weights.
Flat rate options like USPS Flat Rate boxes or Sendle’s simplified pricing may also help sellers keep rates increases more manageable.
January is a good time to review your entire shipping mix and figure out what you can do to minimize these price changes.
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