KNOWLEDGE Base SPONSORED CONTENT
Navigating the 2025 GRIs: What Shippers Need to Know
Each year, FedEx and UPS announce a series of General Rate Increases (GRIs) which serve to inform shippers how much they can expect costs to rise in the coming year.
W ith each rate increase, and several changes to other variables announcement there is a basic
lightweight packages under 5 pounds on 3-day delivery, or where surcharges make up more than 20% of overall costs. ● Fuel Surcharge Discounts Losing Impact: As base rates for fuel surcharges climb, the effectiveness of previously negotiated discounts diminishes, even as fuel prices decrease in certain areas. Plan for the Future Amid these challenges, there’s a positive development: Both carriers currently have available capacity in their networks and are offering more favorable rates, terms, and conditions than have been seen in years. This creates an opportunity for shippers to secure better deals during contract negotiations. One other observation to note is that both carriers are also taking a new approach to cost increases—more and more, they are spreading out the changes across the calendar year, instead of grouping them all into the GRI release timeframe. This means that it is more important than ever before to continuously review and understand what your shipping expenses are, as there could be a fuel surcharge or new zoning fee added in Q2 of 2025 that could impact your expenses even more.
increase of 6.3%. Meanwhile, FedEx customers making identical shipments could face an average increase of 7.0%. That said, certain shippers could still face increases ranging from 12% to 16%. Both carriers are optimizing their networks
that can add additional expenses to a company’s bottom line—and can come as quite a surprise if you’re not paying close attention. Even though the new year has already begun, there is still time to learn exactly what the true impact of these changes are and to both make adjustments to how you ship goods and to work with your carrier representatives to renegotiate terms where it makes sense. Analyzing the 2025 Increases Beyond the advertised rate increases, carriers continue to leverage other revenue-boosting mechanisms. These include adjustments to zoning, weights, package dimension requirements, and a variety of ever-changing surcharges. Adjustments to these areas can signi cantly in ate shipping expenses. To provide clarity, we here at Reveel analyzed the announced GRIs using advanced modeling techniques. By applying the updated rates, rules, and surcharges to millions of shipments from the previous year, we’ve been able to put together a detailed year-over-year cost comparison with some noteworthy insights. Unlike prior years, the 5.9% GRI increase announced by both carriers is more re ective of the actual cost increases many will encounter. Our data shows that UPS customers shipping the same items as last year will likely see an average cost
to prioritize the package dimensions and weights they prefer, while imposing steep surcharges on any outliers. As a result, some businesses may want to consider adopting a multi-carrier strategy. Increases and Changes of Note While the speci c impact of the GRIs will vary by company, there are some key ndings: ● Urban Areas Feel the Squeeze: Delivery Area Surcharges (DAS) will rise by an average of 6–7% for both carriers. Notably, densely populated metro areas are now included in DAS designations, which were previously associated with remote locations. ● Larger Packages Face Steeper Fees: Additional handling and large package surcharges will increase dramatically, with costs rising by 21–29% based on factors such as size, zone, service level, and carrier. ● FedEx Shippers: Higher costs are expected for businesses shipping from East or West Coast locations, frequently using 2-day or 3-day services, handling packages averaging 10 pounds or more, or relying on surcharges that comprise more than 20% of total shipping expenses. ● UPS Shippers: Signi cant cost hikes may hit businesses that rely on 2-day or 3-day services, particularly for
–By Josh Dunham
CEO and Co-founder Reveel reveelgroup.com
To get a closer look at how the 2025 GRI changes can impact your company, download a free copy of Reveel’s 2025 GRI guide at: reveelgroup.com/2025-gri/
January 2025 • Inbound Logistics 55
Powered by FlippingBook