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UPS to raise tariff rates 5.9%, matching FedEx

UPS decides not to go above rival

Mark Solomon
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UPS hikes 2024 tariff rates by 5.9% to match FedEx (Photo: Jim Allen/FreightWaves)

UPS Inc. (NYSE: UPS) said late Thursday that it will raise 2024 tariff rates 5.9% on all air, ground and international services, effective Dec. 26.

The move matches rival FedEx Corp. (NYSE: FDX), which announced a 5.9% increase late last month.

Both carriers have thus reduced their tariff rate increases by 1 full percentage point from 2023’s record increase of 6.9%. Tariff, or noncontract, rates are infrequently utilized in the parcel-delivery world, where virtually all goods move under contract. However, they generally serve as a jumping-off point for contract negotiations.

After FedEx’s announcement, there was speculation that UPS might come in with a higher increase to offset the higher labor costs of the first year of the five-year contract with the Teamsters union.

FedEx’s fairly restrained increase might have been a way to further pressure UPS, especially in the first year of the contract when labor costs are expected to rise as high as 9% year on year.

There was also speculation that UPS, trying to win back business diverted to FedEx and other rivals in the months leading up to the labor agreement, could not risk alienating those customers with an increase that was higher than FedEx’s.

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3 Comments

  1. Midwest Teamster

    UPS does not need to win back clients. A big shipper we lost to FedEx had a blowout pickup two days ago after they called essentially begging to come back.

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Mark Solomon

Formerly the Executive Editor at DC Velocity, Mark Solomon joined FreightWaves as Managing Editor of Freight Markets. Solomon began his journalistic career in 1982 at Traffic World magazine, ran his own public relations firm (Media Based Solutions) from 1994 to 2008, and has been at DC Velocity since then. Over the course of his career, Solomon has covered nearly the whole gamut of the transportation and logistics industry, including trucking, railroads, maritime, 3PLs, and regulatory issues. Solomon witnessed and narrated the rise of Amazon and XPO Logistics and the shift of the U.S. Postal Service from a mail-focused service to parcel, as well as the exponential, e-commerce-driven growth of warehouse square footage and omnichannel fulfillment.