November 9 2007

UPS Shipping Rates

UPS LogoThe end of each year brings more than the holidays for those of us in the mail order business: It brings us the dreaded UPS rate increase.

Every year, just like clockwork, we get the email or letter that tells us of what we will be paying the following year so that we can start prepping our catalogs and websites. Well, I got mine today and it wasn’t pretty, it wasn’t pretty at all. So, let me break it down for everyone out there.

UPS published small package Daily Rates will change as follows*: UPS Ground and UPS Standard to Canada services will increase 4.9%. Air and International express services will increase a net 4.9% through a combination of a 6.9% increase in rates and a 2% reduction in the air and international fuel surcharge.

A 4.9% in UPS ground… wow. This is getting to be a bit much. As this year I have seen one pound packages cost as much $9.20, that means we are closing in on $10 for a single pound. UPS always rounds up to the next pound, so I’m looking at some nasty surprises.

Changes will also be made to accessorial charges. Delivery Area Surcharges and Residential Surcharges will increase by $0.10.

In case you didn’t know, it costs more to ship to a house or apartment than a business, and now it’s going up… again.

The Additional Handling charge will increase by $0.50 and the charge for Address Corrections for UPS Ground packages will increase by $1.00.

Oh I love this one. When you have to call UPS and change an address for whatever reason, they currently charge you a $5.00 fee. Well, that’s now going to be $6.00. The problem is, since we are 100% online, we always copy and paste the address to avoid mistakes. However, we often get customers who call and go “Oh God, I gave you the wrong address! Can you change it?” The problem is, have you ever tried passing a $5.00 fee, let alone a $6.00 one, on to a consumer? Their first assumption is you are trying to rip them off, and trying to prove to them that you are being charged this fee is next to impossible. We almost always end up eating it.

There’s more going on, but they would take too much explanation.

Here’s the problem, I love UPS’ tracking. It’s easy to do, accurate, and hard to argue with, and for the past few years this has been my reason for sticking with them.  The postal service charges $4.60 for a one pound Priority Mail package to any location in the United States.  Hawaii or Ohio… apartment or business… it doesn’t matter, it’s going to be $4.60.  Their tracking isn’t as good, and you can’t change addresses while in route, but, I can’t argue with the price.  Consumer’s are turning more and more to mail order, and though our business does well, we can’t compete with the rates companies like Amazon negotiate, so with each passing year, we look worse and worse, like we’re somehow overcharging for our shipping.

The stupid thing is, once you hit a three pound package or so, UPS usually turns in to the cheaper choice, it’s just that first pound that kills you.  So I won’t get rid of UPS entirely if I change the majority of our shipping to USPS, but this is still going to hurt.  This new increase is just too much, and I just don’t know if we’re going to be able to stick with them this time for the majority of our shipping.

So, don’t be surprised if you start seeing some of your favorite smaller online sellers increasing their shipping costs, and just remember, it’s really not their faults.

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