What 2025 Shipping Rate Increases Mean for Retailers

New year, new rates. While this seems like an annual tradition, knowing why shipping rate increases happen may help ease the pain and, despite the added expense, identify opportunities.

Product inventory may differ between big brands and boutique shops but there’s a common denominator: a shipping rate increase will either force retailers to absorb the cost or pass it on to their customers. It’s hard to find a competitive advantage in that scenario.

However, uncovering the how and why of ongoing shipping rate increases live in supply management’s macro story.

Freight Rates Give Clues to a Bigger Picture

Omnichannel retailers are at the mercy of global supply chains’ resiliency—more so, if their product offerings or materials are sourced overseas. The freight market has experienced an uptick in volatility from geopolitical pressures, climate shifts, port blockages, dockworker strikes, and transit protests. Something’s gotta give.

Risk mitigation to hedge against these events comes with a price, which is passed upstream and flows downstream to 3PLs and their customers—enter shipping rate increases.

Shipping Trends to Watch for Throughout the New Year

While retailers can do little to stop the progression of shipping rate increases, keeping a pulse on 2025 shipping trends can shed light on dock-to-stock expectations and assist in business decision-making.

Global Trade cites five 2025 shipping trends to look out for, impacting retailers and their logistics partners:

1. America-first policies. A new U.S. government administration could bring changes to policy, regulation, and spending, affecting trade and the use of tariffs. How this shakes out is still unknown, but the uncertainty will create media chatter and stalled or panic decision-making.
2. Revisiting sustainability requirements and enforcement. Mandates affecting material sourcing, energy use, and business practices could ease.
3. Dimensional weight pricing could be the industry standard. This shift away from actual weight measurement puts an emphasis on package size and efficiency, favoring smaller packages. Expect shifts in design toward flexible packaging minimizing waste.
4. Prioritization of paper packaging. If trend #2 takes place, it won’t necessarily sway consumer preferences for eco-friendly products, including packaging.
5. AI and automation adoption. Greater efficiency is synonymous with technology. More logistics service providers will invest in and integrate AI and automation to streamline storage, inventory management, packing, and fulfillment for greater production, visibility, and accuracy.

Strengthening Retailer-to-Consumer Relationships

Introducing retail customers to price increases can be challenging, but presents opportunities. When retailers focus on presenting the value of their brands, customers can feel more comfortable with a shipping rate increase to get the products they love, through a reliable 3PL provider.

When announcing increases, it might be a good time to run a customer appreciation campaign to reinforce brand value and company culture, or create incentives to support customer retention and growth.

Consistency in omnichannel messaging is essential, as many customers refer to multiple touchpoints in the buyer journey, not only before a purchase is made but throughout fulfillment.

2025 Shipping Rate Increases

Use the following information to plan for 2025 rates from UPS, USPS, FedEx, and DHL shipping service providers.  

USPS – rate increases go into effect January 19, 2025

(percentages indicate year over year 2024- 2025 rate increase) 

• Connect Local: 5.4% 

• Ground Advantage (average): 3.9% 

• Ground Advantage (retail): 4.9% 

• Ground Advantage (commercial): 3.2% 

• Parcel Select (average): 9.2% 

• Parcel Select (delivery unit entry): 10.3% 

• Parcel Select (hub entry): 0% 

• Parcel Select (sectional center facility entry): 7.1% 

• Parcel Select (network distribution center entry): 9.7% 

• Priority Mail: 3.2% 

• Priority Mail Express: 3.2%

PLEASE NOTE: Above price increases are pending Postal Regulatory Commission review. 

UPS – 2025 rate increases go into effect December 23, 2024

(percentages indicate average net year over year 2024- 2025 rate increases) 

• UPS® Ground: 5.9%  

• UPS® Air:  5.9%  

• UPS International: 5.9%  

• UPS Air Freight (within and between the U.S., Canada, and Puerto Rico: 6.0% 

The above rate changes can impact shipping costs differently, depending on specific shipping characteristics and terms of your UPS agreement.   

PLEASE NOTE: Visit ups.com/rateupdates for the most up-to-date shipping rates. 

FedEx – 2025 rate increases go into effect January 6, 2025

(percentages indicate average year over year 2024- 2025 rate increases) 

• FedEx package: 5.9% 

• Freight standard: 5.9%
  Applies to FXF PZONE, FXF EZONE, Offshore (includes FXF 300, FXF 303, FXF 352, and FXF 370 series), FXFC 1100 (Intra-Canada) rates, and Commodity rates (includes pallet, volume, or truckload). 

Above increases apply to U.S., U.S. export, and U.S. import services.  

• FedEx Ground® Economy will increase 

• FedEx Ground Multiweight® will increase 

• FedEx International Premium® will increase 

• FedEx International Priority DirectDistribution® will increase 

• FedEx U.S. and international package services minimum rates will increase 

• Pricing for FedEx One Rate will change 

• FedEx retail rates will change 

View 2025 FedEx standard list rates  

View 2025 optional and additional service charge changes 

View FedEx Freight zone-based rate booklets: 

• Within the contiguous U.S. 

• From the contiguous U.S. to Canada 

• From Canada to the contiguous U.S. 

• Mexico Door-to-Door: 6.9%
  Applies to FXF 1000, FXF 501, FXFM DD 

• Intra-Mexico shipments: 6.9%
  Applies to FXFM IMS 

• FedEx Freight box rates will not increase. 

PLEASE NOTE: FedEx Logistics base customs brokerage rates will increase 4%, and does not apply to any ancillary fees for customs brokerage services. 

DHL – 2025 rate increases go into effect January 1, 2025

(percentages indicate average year over year 2024- 2025 rate increases)  

• DHL Express (for U.S. account holders): 5.9% 

• Other services and surcharges may also be modified
  Inflation, currency fluctuations, and administrative costs associated with regulatory and security measures can lead to such changes. Updates occur from national and international authorities in the over 220 countries and territories that DHL Express serves. Check for country-specific regulations.

PLEASE NOTE: For international shipping information, refer to DHL Express here.  

Reassess Strategic Logistics Partnerships

Many brands place a strong emphasis on the quality of their products, a key differentiator from their competition. Nothing can diminish that competitive edge than a lackluster level of service throughout the fulfillment cycle.  

Partnering with a reliable 3PL company adds another layer to a retailer’s value chain that can make or break the customer experience.  Harte Hanks reported 37% of consumers who had a poor delivery experience ended their relationship with that retailer.  

Staying with a 3PL operation that doesn’t honor their customers through responsible and accountable practices could wind up with business attrition. Third-party logistics providers are meant to add strength to retail brands, not diminish it. 

When shipping rate increases happen, it’s a good time to reassess current 3PL relationships and discover whether the partnership aligns with expectations or falls short. As a retailer, you already know your customers shop around before making a purchase. You can do the same with your logistics providers. 

Assess the benefits of current providers and search for alternative providers that offer the same, and more.  

Ask questions and request data supporting their: 

• Industry reputation 

• Certifications 

• Sustainability practices 

• Duration of client partnerships 

• Range of services 

• Use of technology, AI, and automation 

• Integrations and partnerships  

Searching for a reliable 3PL partner should lead to a just-right fit—you know when it’s there. 

Stay on Top of Logistics Industry News

Ecommerce retailers are uniquely positioned to enjoy building an individual brand while casting a wide net touching other verticals and customers across the globe. This dichotomy in size mirrors the importance of maintaining connectivity to both niche and mass markets. 

Consider establishing a list of preferred news resources that report on supply chains and logistics. Having verifiable and trusted information from industry experts helps retailers navigate changing environments and avoid costly knee-jerk reactions.  

And because retailers deal with surprises beyond shipping rate increases, a 3PL partner can be another go-to, advising alternative packaging and logistics solutions to trim costs, serving retailers and their customers best.  

Learn how WSI maximizes inventory, storage, and fulfillment efficiency and scalability. Here’s how we can help.