UPS SurePost changes: What they mean for you and how to respond

Yoda

3 min read
Jan 20 2025

Jan 20
15

Seller with a clipboard and computer managing ecommerce packages

If you’re a regular user of UPS SurePost or Ground Saver services, you’re likely aware of their unique cost-saving model. Historically, these services relied on a hybrid delivery approach, where packages were delivered partially by UPS and partially by USPS. These services were generally priced cheaper than standard ground residential service and typically a day slower. They were particularly cost-effective for items under 10 pounds. You might recognize this by the distinctive double labels used for such shipments.

However, a significant change has recently taken place, and it could have a considerable impact on your shipping costs.

What changed?

UPS SurePost packages are no longer being delivered by the United States Postal Service after a contract between the two entities expired. As of December 31st, 2024, USPS no longer permits packages to be dropped off at local post offices by third parties like UPS. Additionally, the use of double labels has been discontinued. These changes have led UPS to raise SurePost rates by 9.9%. The new rates became effective on January 13th, 2025.

Real-world impact of the rate increase

Here’s how the numbers break down:

For a 1lb package that would travel less than 150 miles (zone 2):
- Old Rate (as of January 12th): $11.17 + 17.5% fuel surcharge = $13.12.
- New Rate (as of January 13th): $12.28 + 17.5% fuel surcharge = $14.43, reflecting a 9.9% increase.

1 lb – Zone 2	2024 Rate	2025 Rate	% Change
Base Rate	$11.17	$12.28	9.94%
Fuel Surcharge (17.5%)	$1.95	$2.15	9.94%
Total	$13.12	$14.43	9.94%

If your business spent $1 million on SurePost in 2024, this rate hike alone could add $100,000 to your shipping expenses!

Additional challenges: Area code delivery fees

Adding to the burden, UPS has significantly increased its Delivery Area Surcharge (DAS), which applies to certain zip codes (~30% of the U.S. population). This fee rose from $3.80 to $6.15, a staggering 62% increase.

Old DAS Total Cost: [$11.17 (base rate) + $3.80 (DAS)] * 1.175 (fuel surcharge)= $17.59.
New DAS Total Cost: [$12.28 (base rate) + $6.15 (DAS)] * 1.175 (fuel surcharge) = $21.66.

1 lb – Zone 2	2024 Rate	2025 Rate	% Change
Base Rate	$11.17	$12.28	9.94%
DAS	$3.80	$6.15	61.84%
Subtotal	$14.97	$18.43	23.11%
Fuel Surcharge (17.5%)	$2.62	$3.23	23.28%
Total	$17.59	$21.66	23.14%

If your business spent $1 million on SurePost in 2024 to affected areas, this rate hike alone could add over $200,000 to your shipping expenses!

This equates to a 23% increase in costs for packages delivered to affected areas.

What can you do?

The shipping market is competitive, and there are steps you can take to mitigate these rising costs. Don’t let these changes affect your bottom line without exploring your options.

Evaluate alternative carriers and consolidators: FedEx Ground Economy and consolidators like DHL eCommerce offer services comparable to SurePost. It’s crucial to compare rates and services to find the best fit for your needs.
Negotiate your rates: If you’re a high-volume shipper, leverage your volume to negotiate better discounts or revised rate structures with UPS.
Seek expert advice: Understanding all the nuances of shipping contracts and rates can be challenging. Engaging an expert can help you identify savings and optimize your shipping strategy.

At Threecolts, we specialize in helping businesses navigate these complexities and uncover cost-saving opportunities. Don’t take these changes sitting down!