YCD News-UPS recently announced that it will increase its combined 2024 rates for all air, ground and international services by 5.9 percent, effective Dec. 26, matching the 5.9 percent increase announced by rival FedEx Corp. late last month.
The move matches that of rival FedEx, which announced a 5.9 percent increase late last month.FedEx’s 2024 rate and surcharge changes go into effect on January 1st.
The two courier giants reduced their rate increases by a full percentage point from a record 6.9 percent in 2023. Non-contractual rates are rarely used in the parcel delivery space, where nearly all shipments are shipped under contract. However, they are often the starting point for contract negotiations.
FedEx’s announcement followed speculation that UPS might raise wages to offset higher labor costs in the first year of a five-year contract with the Teamsters.
FedEx’s fairly restrained hike could be a way to put further pressure on UPS, especially in the first year of the contract, when UPS’s labor costs are expected to rise as much as 9% year-over-year.
There is also speculation that in the months leading up to the labor agreement, UPS was trying to recapture business that had shifted to FedEx and other competitors, and therefore couldn’t risk alienating those customers with higher increases than FedEx.