USPS, UPS 2024 General Rate Increases
Postal and courier companies adjust their rates every year to make up for rising operating costs and keep up with inflation. The year 2024 is not an exception; the United States Postal Service and UPS announced their general rate increases for 2024 in the fall of 2023 so that customers don’t get off guard when shipping prices are raised.
First and foremost, let’s figure out what a general rate increase is. Postal and courier companies, including state-owned enterprises like the USPS, are businesses that need to make a profit or at least break even. This means that they have to increase their rates as their operating costs grow, which can happen due to a temporary increase in demand, inflation, and other factors.
Shipping rate increases can be temporary (for example, peak season surcharges) or permanent. A yearly shipping rate increase implemented by all or most postal and courier companies to account for inflation and rising operation costs is called a general rate increase (GRI). It is usually announced in the fall and comes into effect sometine in January, although there may be some exceptions.
Postal and courier companies can’t just increase their rates on a whim; the GRI is based on objective market conditions such as fuel costs, average wage, inflation, etc. As a government agency, the United States Postal Service (USPS) needs its GRI reviewed and approved before it is announced to the public and comes into effect. The proposed prices are first approved by the USPS Board of Governors and than submitted to the Postal Regulatory Commission (PRC).
Private companies, such as FedEx or UPS, don’t have to get their new rates approved, but they can’t increase them too much because they need to state competitive. GRIs can vary between carriers, but they usually sit between 4 and 6 percent. Sometimes carriers increase the cost of some services but not others.
USPS 2024 General Rate Increase
The United States Postal Service filed notice with the PRC and announced the upcoming price changes for its shipping services on November 15, 2023. These proposed changes will take effect on January 21, 2024.
Customers should expect USPS Ground Advantage prices to increase by 5.4 percent, Priority Mail service prices to increase by 5.7 percent, and Priority Mail Express service prices to increase by 5.9 percent. The USPS will also adjust prices for some of its special services, such as PO Box rental fees, and some international mail services, including Registered Mail and International Mail insurance.
UPS 2024 General Rate Increase
UPS unveiled its annual rate increase in October 2023. The announcement stated that the average GRI would be 5.9 percent, but the actual numbers would vary depending on the package weight (the higher the weight, the bigger the increase) and other factors. Many of the new rates actually exceed the 5.9 percent average GRI.
UPS also increased the cost of most of its value-added services, such as additional handling, address correction, Collect on Delivery, delivery area surcharges, delivery confirmation, etc. The UPS General Rate Increase for 2024 came into effect on December 26, 2023.