2024 Shipping Rates (USPS, UPS, FedEx)

Few companies are immune to shipping rate increases. For some businesses, shipping costs make up a significant percentage of overall operating expenses. And in industries with smaller profit margins, any shipping rate increase will impact profitability. In the United States, the general rate increases (GRIs) of the United States Postal Service (USPS), Federal Express (Fed Ex), and the United Parcel Service (UPS) also affect private citizens.

Traditionally, most major carriers announce changes to GRIs in the fourth quarter of the year before the increases take effect. On September 7, 2023, FedEx was the first to announce its general rate increases for 2024. UPS quickly followed with its own announcement, though rates were not published until October. The USPS announced its 2024 general rate increases in October.

US Postal Service (USPS)

Benjamin Franklin became the first USPS postmaster in 1775. He was tasked with creating a system to keep the country’s citizens informed. Today, that system operates 31,330 post offices and delivers almost 130 billion mail articles each year. For 2024, the USPS mail and shipping rates will increase as follows:

• First-Class Mail (1 oz) will increase by $0.02 to $0.68, and metered 1 oz mail will increase by $0.01 to $0.64.
• First-Class Postcards will increase by $0.02 to $0.53.
• International Postcards and Letters (1 oz) will cost $1.55, up $0.05 from 2023.

Letters over 1 oz will be charged the current rate of $0.24 per ounce.

For ground and priority mail, rates will increase:

• 4% for USPS ground advantage.
• 7% for priority mail.
• 9% for priority mail express.

The USPS is also seeking approval to adjust prices on other services such as certified mail, money orders, and post office box rentals.

UPS

UPS originated as the American Messenger Company in Seattle, Washington back in 1907. The company relocated to California before moving to its current corporate headquarters in New York City. UPS employs close to 600,000 workers and in 2022 alone, delivered 6.2 billion packages to 11.1 million customers in over 200 countries.

Although UPS announced a 2024 general rate increase shortly after FedEx, they waited until the end of October 2023 to publish them officially. Analysts speculated that the company was surprised by the early FedEx announcement and did not have its rates finalized. When the rate was announced, UPS matched FedEx’s 5.9% increase. The effective date for the rate change is December 26, 2023.

These increases only apply to the base rates. The final cost depends on the weight, distance, and applicable surcharges. UPS 2024 GRIs are:

• Next Day Air: 7.91%
• Next Day Air Saver: 7.51%
• Two Day: 5.48%
• Three-Day Select: 4.52%
• Ground: 5.49%

Lightweight ground shippers are unlikely to see significant increases, while customers using Next-Day and Second-Day Air will experience the largest price hikes regardless of weight. All businesses should assess the accessorial and handling rate increases as the 2024 increases could significantly impact bottom lines. For example, large package shippers could see an increase of up to 19.5% for additional handling and large package surcharges.

FedEx

The Federal Express Corporation was founded in 1971 in Little Rock, Arkansas. It began operations on April 17, 1973, when its 389 employees and 14 aircraft delivered 186 packages to 25 cities. Today, the company has about 530,000 employees and delivers over three billion packages annually.

The overall 5.9% increase they’ve adopted applies to base rates and does not include accessorial or handling charges. The following rates take effect on January 1, 2024:

• Priority Overnight: 7.88%
• Standard Overnight: 7.5%
• Two Day: 5.49%
• Express Saver: 4.47%
• Ground: 5.94%

Added surcharges for special delivery, handling, and large package shipments mirror those of UPS, with $7.50 being the most significant difference between a UPS and FedEx surcharge.

Comparing USPS, UPS, and FedEx Rate Changes

Of the three carriers, USPS offers the least expensive ground delivery service. A one-pound package averages $7.35 depending on size, weight, destination, and possible surcharges. UPS Ground costs $7.50 for the same package, and FedEx Ground is the highest at $8.25 for a one-pound package.

Express Shipping

FedEx offers the lowest rates for express shipping. Its two-day air service costs $21.00 for a one-pound package and $65.00 for a 20-pound parcel. The same items would cost $22.00 and $70.00 with UPS second-day air. The USPS priority mail express service charges $24.90 for a one-pound package and $75.00 for a 20-pound shipment.

Overnight Shipping

Shipping a 20-pound package using FedEx’s standard overnight service costs $110.00, compared to the USPS priority mail express charge of $89.00. UPS’s next-day air service charges $100.00 for a 20-pound package.

The above estimates do not include surcharges, fees, or special handling costs. These prices also do not reflect discounts or fees for customs, duties, and taxes on international shipments.

Choosing the Right Carrier

Determining which carrier would be the most cost-effective option for any business depends on what is being shipped, how it is being shipped, and where it is being shipped. For example, UPS is known for efficiently handling heavy and oversized packages but offers limited weekend deliveries. FedEx specializes in fast and reliable delivery with a range of specialized shipping options, though they do charge more for weekend deliveries. Both FedEx and UPS offer discounts to volume shippers.

The USPS has the most extensive domestic shipping network and is the least expensive option for small, lightweight packages. They also don’t charge extra for Saturday or residential delivery. However, USPS often has slower delivery times, and their tracking system is less reliable than UPS and FedEx.

One of the best ways to minimize shipping costs is to look into different packaging options. Placing odd-shaped items into stackable containers can reduce surcharges. Using lighter shipping materials will reduce the weight of any shipment. Postal Totes offers a range of products to help minimize shipping costs. Our parent company, Flexcon Containers, is one of the leading tote, container, and plastic product manufacturers in the country. We excel in material handling and logistics. We’ve been in business for over 50 years, and we are known for our versatility, quality, and commitment to meeting our customers’ needs. Come to Postal Totes for innovative solutions to your mail tote needs. Contact us before the 2024 rates take effect to discover the right solution for your organization.