US Postal Service (USPS), United Parcel Service (UPS), and FedEx have new shipping rates for 2025.
USPS has announced that the USPS Board has approved their proposed tariff hike for Governors. “It’s expected to sustain investments in infrastructure, technology, and workforce development, totaling $40 billion,” reads the statement.
FedEx and UPS are increasing their rates by an average of 5.9%. UPS is not waiting until January before increasing its rates. The increase will be effective from December 23, 2024.
Last year, FedEx and UPS also increased their rate by 5.9%.
USPS increases as of 19 January 2025
- Priority Mail: Prices will increase by approximately 3.2%.
- Priority Mail Express: A similar 3.2% increase will apply.
- USPS Ground Advantage: Rates will rise by 3.9%.
- Parcel Select: The highest increase, at 9.2%.
Mailing Services rates, including the price of a First-Class stamp, will remain unchanged in January 2025.
How to adjust your shipping strategy for 2025
Fuel and labor costs increase each year, resulting in shipping rates also growing.
But businesses have to decide their strategy for 2025. Will they continue to offer free delivery, offer a flat rate, or pass the increases on to customers?
Shopify warns that shipping costs are among the most significant factors leading to abandoned carts.
So remember, if you choose to pass on the increases to your customers with a higher delivery fee, you might see a higher number of cart abandonments.
Step-by-step guide: How to prepare for shipping cost strategy
Step one: Evaluate your shipping model
Choose what model fits your business best. Can you afford to offer free delivery to customers?
Step two: Consider free shipping minimums
To avoid abuse of the system, consider implementing a minimum order threshold for free shipping. This will encourage shoppers to purchase larger orders.
Step three: Adjust your shipping rates
Consider if you want to adjust your product pricing to absorb the increased shipping rates.
Remember to look at your competitor’s offering before making your final decision. Your products must maintain a competitive appeal.
Step four: Communicate transparently
Keep customers informed. If you increase the delivery fee, communicate the changes early and highlight your efforts to maintain value despite the industry-wide challenges.
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About the author
Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand.
