First and foremost I would like to wish everyone happy and healthy New Year. In my newsletter article, I would like to share some of my personal views and experiences from a Carrier Relations perspective, as well as jumping into what to look out for and what shippers should be doing to be prepared for the year.
As 2026 approaches, shippers must prepare for another year of structural pricing changes, service adjustments, and continued pressure on parcel costs from the two dominant carriers: FedEx and UPS. While neither carrier has officially released their full 2026 program details yet, recent General Rate Increases, surcharge strategies, and operational investments provide a clear roadmap of what’s coming.
Continued Rate Pressure Beyond the Headline GRI
Both FedEx and UPS are expected to announce a 2026 GRI in the familiar 5.9%–6.9% range, but the true impact will again exceed the headline number. In recent years, carriers have leaned heavily on dimensional weight rules, minimum charges, and surcharges to drive effective increases well above the published base rates. Shippers should anticipate higher net costs even if shipment volume remains stable.
Surcharges Are Here to Stay—and Expand
Surcharges have become permanent pricing fixtures rather than temporary adjustments. In 2026, expect:
UPS has been particularly aggressive in using surcharges to manage network profitability, while FedEx continues refining surcharge categories to align pricing more closely with handling costs. If there are any areas of uncertainty, please reach out to any one of us in the CR department to discuss the changes, as it can greatly affect your customers.
Diverging Carrier Network Strategies
UPS is doubling down on its strategy to prioritize higher-margin, enterprise and healthcare shipments, signaling less tolerance for unprofitable e-commerce volume. This may result in stricter enforcement of package requirements, tighter service commitments, and reduced flexibility for smaller shippers.
FedEx, meanwhile, continues integrating its Ground and Express networks. By 2026, shippers should expect further service standard adjustments, more zone-based pricing alignment, and fewer distinctions between “express” and “ground” operations. While this may improve efficiency, it also reduces premium service differentiation.
Dimensional Weight and Package Compliance
Both carriers are expected to further tighten compliance around package dimensions, weight accuracy, and labeling. Automated measurement systems will continue to drive billing corrections, leaving little room for error. Shippers with inconsistent packaging or manual processes will face increased invoice adjustments.
What Shippers Should Do Now
To prepare for 2026, shippers should:
Bottom Line
In 2026, FedEx and UPS will continue shifting from aggressive market capture to profitability optimization on existing business. For shippers, this means higher costs, more complex pricing, and less flexibility—but also an opportunity to gain leverage through smarter analytics, packaging discipline, and proactive carrier strategy. Those who prepare early will be best positioned to control costs in an increasingly disciplined carrier environment. Our analysis department is consistently evolving in their reporting and there are going to be a lot more BFAM and Gainshare opportunities in the near future. I am asking all partners to bring any BFAM prospects to Carrier Relations department’s attention so that we can game plan on how to negotiate a tailored agreement that maximizes margins. Q1 and Q2 is crucial, so let’s be proactive. Looking forward to hearing from all partners.