UPS Hikes Mail Innovations Rates ~25% In Christmas Eve Surprise Announcement

UPS has dropped a big Christmas Eve surprise, notifying shippers who use their Mail Innovations service that rates will be increasing by ~25% on January 1st.

ShipMint founder Brandon Staton posted the notice on LinkedIn, saying customers had zero time to adjust to the much steeper rates.

UPS is putting the blame for the increase directly on USPS, saying Parcel Select increases, eliminating discounts for DDU-entry and other Postal Service actions have put the company in an untenable position.

On November 15, the United States Postal Service (USPS) announced that it intends to raise its Parcel Select rates by 9.2%, effective January 19, 2025.

This comes after the Postal Service first raised its Parcel Select rates 5.9% on average in January 2024 and then implemented a further Parcel Select rate increase of 25% in July. In addition, the Postal Service has eliminated the Parcel Select Lightweight product and discounts for DDU-entry.

UPS Mail Innovations has taken and will continue to take steps to minimize the impact of the Postal Service’s product changes and rate increases on our customers. However, as a result of recent Postal Service actions, UPS Mail Innovations has to adjust the 2025 rates.

We do not take this increase lightly, and we have done diligence to minimize the impact on our customers. Please see the following page(s) for your new 2025 rates, which will be effective January 1, 2025.

UPS Mail Innovations is a contracted service offering with negotiated rates, so while it's not possible to show an exact rate breakdown, Staton went on to share thoughts about the general impact of this change based on ShipMint's analysis of from their customer data.

BREAKING: UPS Mail Innovations Announces Steep Rates Hike on Christmas Eve (Effective January 1)—Biggest Impact on Lightweight Shipments

As the year comes to a close, ShipMint has been carefully analyzing the latest rate changes announced by UPS Mail Innovations (MI). We’ve confirmed that, on average in the cases we studied in our preliminary analysis, the new pricing represents a 25% increase, with the lightest packages hit hardest.

Brandon Staton

According to ShipMint's analysis, the new pricing represents a 25% increase, with the light packages seeing the largest difference.

Lightweight Packages Face the Steepest Hike
While across-the-board increases are apparent, ShipMint’s preliminary analysis shows that the lightest parcels—traditionally the lifeblood of many e-commerce brands—are seeing the highest percentage increase.

For merchants whose product lines depend on competitive shipping costs for lightweight items (like apparel, accessories, or small electronics), this could mean a significant bump in operational expenses starting the very first day of the new year.

Parcel Select Lightweight Eliminated
The most notable news from the UPS Mail Innovations announcement is the confirmation of the long-rumored elimination of the USPS Parcel Select Lightweight product. UPS MI's subsequent on sub-1 pound shipments, sends a strong signal that other major carriers (like DHL and regional forwarders) are likely to announce similar changes, sending ripple effects throughout the e-commerce sector.

What This Means for Shippers

• Tighter Margins: The 25% jump—particularly on lighter parcels—can eat into already-tight margins for online retailers.
• Minimal Adjustment Time: A mere one-week notice leaves businesses scrambling for contingency plans.
• Other Carriers Likely to Follow: As the USPS has retired Parcel Select Lightweight, other shipping providers often align their product offerings and rates to ensure market competitiveness.

How will this UPS Mail Innovations rate hike impact your ecommerce business? Let us know in the comments below!