New Increases Announced by FedEx and UPS

Both FedEx and UPS announced rate increases this week that will take effect June 2, 2025. These updates will impact shippers of all sizes, especially those managing high volumes, residential deliveries or oversized shipments.

Whether your business relies on parcel shipping for eCommerce, B2B distribution or retail replenishment, now is the time to evaluate how these changes may affect your bottom line and overall fulfillment costs.

Changes to UPS Shipping Charges

UPS is rolling out updated zone definitions and higher surcharges that will affect a wide variety of shipments, particularly those moving across longer distances or falling under “additional handling” classifications.

Key updates include:

  • Zone realignments that may increase shipping rates for some origin-destination ZIP pairs
  • New surcharge levels for Zones 7 and above:
    • Additional Handling – Weight: $55.00
    • Dimensions: $38.00
    • Packaging/Other: $31.50
    • Large Package – Commercial: $260.00
    • Large Package – Residential: $305.00
  • Remote Area Surcharge now applies to Ground Saver shipments in certain ZIP codes
  • Shipping Charge Correction Audit Fee increases to the greater of $1.65 per package or 12% of total corrections in each invoice cycle
  • Over Maximum Limits Fee rises to $1,775 per package

For shippers operating on a larger scale, these updates to UPS shipping charges could lead to substantial added costs if proactive adjustments aren’t made.

FedEx Shipping Charges Also on the Rise

FedEx is adjusting its Delivery Area Surcharge (DAS) structure, which affects how residential and rural deliveries are priced. These updates apply across multiple states, changing how and where extra fees are applied.

Notable changes include:

  • New DAS ZIP codes added in Georgia, Florida, Texas and California
  • ZIP code reclassifications between Extended and Contiguous U.S. surcharge tiers
  • DAS removals in a few areas which may reduce rates for certain destinations

These changes to FedEx shipping charges will particularly impact small package shipping operations that depend on reliable last-mile service to residential zones. Reviewing where your packages are going and what surcharges may apply can help avoid costly surprises.

What It Means for Fulfillment Costs

Small changes in rates and surcharges can translate into significant increases in total fulfillment costs when multiplied across thousands of shipments. Businesses that don’t closely monitor changes in shipping charges may experience margin erosion without clear visibility into the cause.

Now is the time to:

  • Re-evaluate ZIP-to-ZIP cost exposure
  • Audit invoices for changing DAS or surcharge patterns
  • Update routing logic or shipping contracts
  • Align fulfillment center locations with demand to limit zone-based increases

How Transportation Insight Can Help

Transportation Insight partners with shippers to navigate complex parcel and small package shipping environments with clarity and control. Our supply chain experts and technology solutions help you:

  • Model cost impacts from UPS and FedEx shipping charge changes
  • Optimize your network and carrier mix
  • Contain rising parcel shipping and last-mile delivery costs

Let’s Talk – Contact us today to schedule a strategy session and get ahead of the June 2 changes before they hit your invoice.