The GRIs from FedEx and UPS are more nuanced this year, with increases that map closer to
the actual cost increases most shippers will incur, but some shipping profiles will still be hard
hit.
With the holiday shopping season in full swing many shippers understandably have their heads down. Although it’s tempting to focus on immediate priorities, now is the time to get in front of carriers’ general rate increases. Like past years, FedEx and UPS again landed on the same GRI – a 5.9% increase for 2025.
Not surprisingly, the GRIs are not the only extra costs shippers will incur. As always, they are merely the most overt way carriers increase their revenue-per-package. Variables not included on rate cards – among them new rules and fees on everything from zones to package dimensions and constantly evolving surcharges – will dramatically impact shipping budgets and some shipping profiles will be hard hit.
So what can shippers who use FedEx and UPS expect in 2025? Our analysis of the 2025 GRIs, which uses sophisticated models to apply them along with the new rules, fees and surcharges now in effect to millions of shipments made last year – results in a year-over-year comparison of real-world costs and some surprising findings.
For starters, this year’s 5.9% GRIs will map closer to the actual increases many shippers will experience. Our analysis shows that UPS customers who ship the same items they did last year will see their costs increase by an average of 6.3%, while FedEx customers that make the same shipments will see their real costs increase by an average of 7.0%.
That’s good news and a far cry from recent years when the disparity between published GRIs and actual shipping cost increases was dramatic. There are; however, important caveats.
Many customers will still see cost increases of 12-16% depending on their shipping profile as both carriers optimize their networks, incentivize the dimensions and weights they want, and add hefty increases to outliers. Many shippers will consider a multi-carrier strategy.
Every shipper should look at how the GRIs will impact their business, but many of the findings in our 2025 GRI Guide are broadly applicable, including:
● For FedEx customers: FedEx customers will be particularly hard hit if they have a point of origin on the East or West Coast, heavily utilize 2-day or 3-day services, have an average parcel weight of ten pounds or more, or if surcharges exceed 20% of their total shipping spend;
● For UPS customers: UPS customers will be particularly hard hit if they often rely on 2-day or 3-day services – especially on 3-day services used for packages that are less than 5 lbs. – or if surcharges exceed 20% of total shipping spend;
● The 2024 peak season will be pricier: Both UPS and FedEx focused on the restructuring, increase and extension of demand surcharges.
● Big is now bad: Additional handling and large package surcharges take center stage in 2025. Over the past two years, FedEx and UPS doubled large package and oversize surcharges. Those costs will increase by 21-29% percent in 2025 depending on size, service level, zone and carrier;
● Cities are the new “remote”: Delivery Area Surcharges (DAS) will increase an average of 6-7% for both FedEx and UPS. Notably, DAS now include some densely populated metropolitan areas despite initially being associated with remote areas; and
● Previously-negotiated fuel surcharge discounts are running on empty: As the base rates for fuel surcharges climb, the effectiveness of previously negotiated discounts diminishes despite decreasing fuel prices in many areas.
Fortunately, there is another important silver lining. Both carriers have capacity in their networks and are negotiating more favorable rates, terms and conditions than we have seen for years, a welcome development for shippers entering contract negotiations.
Josh Dunham is the co-founder and CEO of Reveel whose Shipping Intelligence Platform™ uses Parcel Spend Management 2.0 technology to help parcel shippers immediately lower their shipping costs. "At Reveel, we bring a culture of innovation to shipping intelligence, empowering shippers to make faster, smarter decisions with confidence. Enjoy peace of mind knowing you're in full control of costs and service—without compromise." Shippers are invited to download a free copy of the 2025 GRI Guide.
