Beyond the Sticker Price: Unpacking Parcel Rate Hikes and Hidden Fees

Rate hikes on parcel shipping have become the norm, with shippers typically experiencing increases annually across the major parcel carriers. Most recently, FedEx again increased its parcel shipping rates by 5.9 % (effective January 5, 2026), and it is likely that major carriers like UPS and USPS will soon follow.

While these increases seem minor at first, they only represent a fraction of the full picture. The real rate drivers lie in more unpredictable factors like accessorial fees, surcharges and rule changes that often accommodate rate hikes. Once additional fees are factored in, shippers could see their rates rise by 10 percent or more, making it increasingly difficult to forecast spend, particularly for shippers and e-commerce companies.

While the list of factors influencing rates for various carriers is extensive, understanding the key changes can help companies avoid hidden traps and develop mitigation strategies to help protect their margins.

Breaking Down Recent Changes and Surcharge Updates

While rate increases are relatively standard on an annual basis for parcel carriers, the typical increase amount has risen from 4.9 to 5.9 percent as of 2024. However, along with standard rate changes, carriers have also been applying additional fees and increasing surcharges while also adjusting the criteria for implementing those fees.

Using FedEx as an example:

• FedEx’s flat rate now applies to shipments that do not exceed 55 pounds (previously 70 pounds).
   
• Additional surcharges and handling fees will apply to oversized/bulky packages, with disproportionately higher increases for those items compared to smaller packages.
   
• Delivery area surcharges are now applied to specific zones (e.g., low-volume areas).
   
• Peak season and demand-related fees have increased on a per-package basis
   
• As of August 2025, FedEx has begun rounding up package measurements to the next inch or centimeter when calculating dimensional weight, which can be impacted by even slight changes in packaging and may increase costs.
   
• Late payment fees have increased from 8 to 9.9 percent for FedEx.
   
• International customs-related fees for inbound shipment processing have increased due to tariffs.
   
• Address correction fees have increased to $24 per package.
   
• On-demand pickups (versus scheduled pickups) can incur up to $22.75 per stop.

Controlling the Costs

Staying up to date on the various changes and increases can be overwhelming, but there are a number of steps that companies can take to help minimize their exposure to additional fees and keep costs under control.

1. Run historical shipments through new pricing models to identify high-risk lanes, clients, shipment types, etc. Once any exposed areas are identified, communicate with partners and customers to help identify potential solutions to avoid unnecessary fees.
    
2. Review packaging controls and compare them against new carrier requirements. Since fractional inches or centimeters in dimensions will be rounded up to the next full number, companies could have rates pushed into a higher rate bracket. For items that may be subject to added fees, work to right-size packaging and reduce dimensions where possible.
    
3. With so many potential fees that can be incurred, invoices should be reviewed regularly. Make sure your company or logistics partner understands what fees are being applied, and audit invoices to help recover money that can be lost due to errors.
    
4. Use a multi-carrier strategy to help control costs, especially when delivering to high-cost/low-volume areas. Rather than using a single carrier for the full shipment cycle, exploring local options near more remote delivery zones may uncover opportunities for cost savings.
    
5. Regularly negotiate better terms, service guarantees, discounts, rate caps, etc. Companies can often take advantage of discounts, especially when moving high volumes of shipments.
    
6. Review rates, packaging dimensions, volumes, etc. every 6-12 months to remain up to speed on any shifting requirements, and implement margin buffers to help account for any overages that may occur.

If your company is struggling to keep up with parcel shipping complexities, using a trusted 3PL provider that specializes in parcel shipping can help remove some of the confusion. With custom solutions tailored to your individual needs, NXTPoint Logistics can help decode the fine print and create a parcel strategy that is cost-effective, transparent and built to withstand today’s turbulent environment.

To speak with our experts about how we can help create stability within your parcel shipping strategy, contact us today.