As we wrap up Q2 of 2025, the Analysis team has hit its stride—deepening our understanding of...
Who has been paying attention to all the recent rate changes by FedEx and UPS and who hasn’t been? Well if you haven’t I suggest you do so now!
FedEx and UPS Announce Significant Rate and Surcharge Updates for the Summer 2025, affecting both domestic and international shipments. These adjustments reflect shifting logistics costs and evolving service structures, and will likely have notable impacts on businesses and consumers alike. When one carrier has an update, it is safe to say that the other will follow the leader.
In case you missed the series of updates to pricing and surcharges in the month June, see below. There are also going to be several important updates for the upcoming months as well. If you need clarification, do not hesitate to reach out to me to have a further discussion.
FedEx
June 1: The Late Payment Fee will increase from 8% to 9.9% of the past-due invoice balance.
June 2: Changes will be made to the Delivery Area Surcharge ZIP code lists for U.S. package services.
- View the 2025 Delivery Area Surcharge ZIP code changes PDF.
- View 2025 Delivery Area Surcharge ZIP code lists:
June 9: FedEx will adjust fuel surcharges across multiple services, including FedEx Ground, Home Delivery, and International Ground.
July 14: Stricter penalties will apply for international package and freight shipments that exceed size and weight limits, including new Unauthorized Package and Freight Charges.
- New Unauthorized Package Charge and Unauthorized Freight Charge:FedEx international and intra-country1 express parcel and express freight packages exceeding the maximum allowed dimensions and weight will be charged the applicable Unauthorized Package Charge or Unauthorized Freight Charge.
- Additional Handling Surcharge (AHS) Threshold Update: AHS will apply to international and intra-country2packages weighing greater than 55 lbs/25 kgs, replacing the previous threshold of 70 lbs/31 kgs.
- U.S. Domestic Surcharges for Non-Standard Shipments: Rates will increase for some U.S. domestic non-standard shipment surcharges in select zones.
1 Excluding intra-country Brazil, Chile, Colombia, Malaysia, Mexico, Thailand, United Kingdom, and U.S. domestic
2 Excluding intra-country Brazil, Chile, Colombia, France, Italy, United Kingdom, and U.S. domestic
- FedEx is announcing a rate increase for the FedEx One Rate Special Pricing Program, effect July 14, 2024. Keep an eye out for the July updated rate guide from Sammy on the rate changes that we affect the 2Day One Rate Programs. If there is a particular industry that you are concerned about, don’t hesitate to reach to me and I can give you a preview of what those rates are.
August 18: A new pricing structure for parcel pickups in the U.S. and Canada will be introduced.
- Additionally, the weight threshold for the Additional Handling Surcharge for international packages will drop from 70 lbs. to 55 lbs.
UPS
June 1: Updates to ZIP codes eligible for Area Surcharges.
- The list of ZIP codes to which Area Surcharges apply will change. The current list of Area Surcharge ZIP codes can be found here.
June 2: Revised Zone Charts will take effect, potentially changing the applicable zone for certain origin/destination ZIP code pairs.
- Surcharge increases:
- Additional Handling Weight: $55.00
- Large Package (Residential): $305.00; (Commercial): $260.00
- Over Maximum Limits Fee: Increased to $1,775
- Shipping Charge Correction Audit Fee: The greater of $1.65 per package or 12% of the correction total
- New fee: $12 International Collect on Delivery (ICOD) charge, billed to U.S. consignees.
- Remote Area Surcharges will now apply to Ground Saver packages in the contiguous U.S.
June 23
- Domestic Fuel Surcharge - the U.S. Ground Domestic and the UPS Ground Saver®Fuel Surcharge and the U.S. Domestic Air Fuel Surcharge will change. Details on these changes can be found here: Fuel Surcharges
June 29
- Surge Fees will apply to certain shipments
- View Surge Fees
August 17: A major overhaul of how the Large Package Surcharge (LPS) and Additional Handling Charge (AHC) are applied:
- LPS will no longer be based on length plus girth. It will now apply to domestic packages with:
- Cubic size over 17,280 cubic inches
- Weight over 110 lbs
- Other factors currently used to determine LPS applicability will remain unchanged.
Domestic LPS Commercial packages: Weight, Cubic Size, Length
Zone 2: $205.00
Zone 3-4: $225.00
Zone 5-6: $250.00
Zone 7+: $260.00Domestic LPS Residential packages: Weight, Cubic Size, Length
Zone 2: $240.00
Zone 3-4: $260.00
Zone 5-6: $297.50
Zone 7+: $305.00- Domestic Additional Handling Charge (AHC):
- AHC will no longer be applied to Domestic Packages based on length plus girth.
- Domestic Packages with a cubic size greater than 8,640 cubic inches will be subject to AHC
- Other factors currently used to determine AHC applicability will remain unchanged.
Domestic Zone 2 Zone 3-4 Zone 5-6 Zone 7+
Weight $43.50 $47.50 $52.75 $55.00
Cubic Size $28.00 $31.00 $36.00 $38.00
Length $28.00 $31.00 $36.00 $38.00
Width $28.00 $31.00 $36.00 $38.00
Packaging $25.00 $29.00 $31.00 $31.50Implications for Shippers
These changes reflect rising operational costs and ongoing investment in logistics infrastructure by both carriers. Businesses relying on shipping services, especially those handling bulky or heavy parcels, should review their logistics strategies and pricing models in anticipation of upcoming increases in cost. The CR department is here to help. Partners should be proactively auditing their customer’s shipping profiles, to have a better understanding on how to help mitigate the financial impact of these new and upcoming changes.
