UPS Hikes Mail Innovations Rates ~25% In Christmas Eve Surprise Announcement
UPDATE 1-8-25
As we wait for official answers from UPS about the future of SurePost, product page updates indicate the company is working to move volume in-house as part of Network Of The Future initiative after USPS contract expired last week.
Liz Morton
UPDATE 1-7-25
USPS is hitting back at attempts to place blame for sudden changes impacting consolidators and hybrid services, with a "no names mentioned" Postal Bulletin clearly aimed at UPS.
Liz Morton
UPDATE 1-2-25
The unannounced UPS updates keep coming as Surepost suddenly drops service to PO boxes, AK, HI, PR and more.
Liz Morton
UPDATE 12-31-24
On the back of changes that have forced UPS to increase Mail Innovations rates, USPS is cranking up the competition for lightweight packages, hoping to woo shippers to Ground Advantage with new streamlined Negotiated Service Agreements.
Liz Morton
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.
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!
A few years ago, when USPS decided to to do a July rate increase on top of the January one, Amazon announced their shipping prices would not change until the following January, probably because they had a specific pricing contract with USPS, and a mid year rate increase was not allowed in the contract.
While these hybrid services like SmartPost aren't technically being discontinued, Dejoy has made it clear that he views certain aspects of them to be "no longer in the interest of the post office" the way they were being operated, so USPS is making policy and rate changes that will filter back to UPS and FedEx resulting in higher rates for those services and/or them deciding to do more of their own last mile delivery again in some areas.
