2017 Shipping Costs

Shipping Costs Have Increased for 2017

Each year our shipping companies make changes in their rates and services — and it is always up not down.  This year is no exception.  These changes can make a big impact on your profits.  You should look at them carefully and determine what you will do for your own individual business.

Here is a brief look at the changes for each shipping company:

United States Postal Service

  • All rates for USPS international mail classes will remain the same for 2017.
  • There will be a 4.1 percent average increase for domestic First Class packages.
  • Domestic Priority Mail rates will rise by an average of 3.9 percent and Priority Mail Express by an average of 3.4 percent.

FedEx

  • Domestic and international FedEx Express rates will rise by an average of 3.9 percent.
  • Domestic FedEx Ground will rise by an average of 4.9 percent.
  • The formula by which dimensional rate is calculated is changing, which means that some large, but lightweight packages may experience a price increase.
  • FedEx Ground Residential Surcharge increases to $3.45.

UPS

  • UPS Ground Residential Surcharge will increase to $3.50. and FedEx Ground Residential Surcharge to $3.45.
  • Effective January 8, 2017, the Additional Handling charge will apply t any package with the longest side exceeding 48 inches, instead of 60 inches for all UPS Air, UPS 3 Day Select® and International packages.
  • Effective January 8, 2017, UPS will change the dimensional weight calculation for U.S. domestic services and UPS Standard from Canada import packages subject to UPS Daily rates.
  • U.S. domestic services packages that are greater than 1,728 cubic inches will use a 139 divisor to calculate dimensional weight. U.S. domestic services packages less than or equal to 1,728 cubic inches will continue to use a 166 divisor to calculate dimensional weight.
  • Effective February 6, 2017, U.S. fuel surcharge will be adjusted weekly.

You can read more about these changes on this website.

We, as small business owners, can do little other than accept these changes and make adjustments in our own businesses to accommodate them.  Since most of us sell via E-commerce and ship many of our orders, this is something that we have to take seriously in order to prevent declining profits.

Some things we can do are:

  • Refer our orders for gifts that have higher shipping costs.  You can use the list of reliable gift company owners at GiftBasketNetwork.com  If your company is not on that list, you can be by joining as either a subscriber or VIP Member.  The listings are different for each.  Check it out here.When you refer an order to another company, the company receiving the referral is expected to pay the referring company 20% of the cost of the order (not including shipping) and keep 80%.  When you make a referral, confirm that the company you are referring to will honor this referral fee.  If not, you may wish to find a different company to refer to.
  • Increase your shipping rates to cover the increase.
  • Include part of the shipping cost in your product cost.

If you have ideas of other ways to handle these constantly increasing shipping costs, we would love to hear about them in the comments below.  Only by working together to address issues concerning our businesses can we succeed as an industry.

 

1 thought on “2017 Shipping Costs”

  1. Good information, especially about the referral orders. I’m at the point where it is embarrassing to even quote the high freight prices, especially when the customer has a small budget. I had a customer in Washington State who kept calling me for her holiday baskets, even though I had moved to Arizona. This year, I quoted her the freight cost (residence surcharge, plus rural area surcharge) & referred her to a company who offered free freight . I’m planning to send her a “Happy New Year” gift to thank her for thinking of me. She is over 85 and a widow, so it makes me sad that people with limited budgets are getting left out,

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