UPS Zones change

UPS Shipping Zones 2025: What the Changes Mean for Your Shipping Costs

by with No Comment BlogBusiness Intelligence

According to some reports, the value of freight shipments across the US is increasing every year. Shipping data is vital for businesses to lower expenses. E-commerce retailers will look for ways to reduce shipping costs. Transportation modes, services, surcharges, and delivery speed affect shipments. Businesses require reliable shipping carriers that suit their business needs.

Leading shipping carriers like FedEx and UPS offer various services and pricing models. Calculating shipping costs is complex as shippers have to consider many variables. Shipping expenses are calculated based on delivery speed, destination, package weight, etc. Further, the US Shipping Zones are used by shipping carriers to calculate shipping expenses.

Understanding US shipping zones helps businesses optimize their delivery options. Shippers can make cost-effective decisions regarding their freight and parcel deliveries. Here, we will discuss the US shipping zones and the latest changes in the UPS Shipping zones. In addition, we will look at new UPS surcharges introduced in March 2025.

Understanding US Shipping Zones

The geographical distance for package delivery is a US Shipping Zone. The US Shipping Zone calculation is across the 48 contiguous US states. Alaska and Hawaii have separate Shipping Zones. The shipping zone calculation is on ZIP codes. It is from a package point of origin to its destination. It helps companies calculate package shipping time and shipping costs.

Usually, the calculation of US shipping zones starts from 2 to 8. It varies slightly between shipping carriers. The Zone number is bigger when the destination ZIP code is further from the origin ZIP code. The division of the US Shipping Zones is as

  • Zone 2: within 150 miles of the origin
  • Zone 3: 151-300 miles from origin
  • Zone 4: 301-600 miles from origin
  • Zone 5: 601-1000 miles from origin
  • Zone 6: 1001 – 1400 miles from origin
  • Zone 7: 1401 – 1800 miles from origin
  • Zone 8: 1801+ mile radius from the origin

FedEx and UPS have their Shipping Zone numbers for different services. Moreover, the package weight across the Shipping Zones influences the shipping costs. For example, FedEx First Overnight service for a five-pound package in Zone 2 amounts to $82.45. On the other hand, in Zone 4, for the same services and package weight, the charges increase to $142.05.

UPS numbers Shipping Zones for internal purposes. For instance, UPS Next Day Air Early service numbers its Shipping Zones as Zone 102 to Zone 108. Another service, UPS 2nd Day Air A.M., numbers its Shipping Zones from Zone 242 to Zone 248.

Shipping calculator tools are available on the websites of many shipping carriers. It helps businesses estimate their shipping costs. FedEx has a particular site for calculating shipping rates based on origin and destination ZIP codes in the US. On the other hand, it is different for UPS as it allows the user to enter the first three digits of a ZIP code and then sends a corresponding Excel sheet for calculations.

UPS Shipping Zones

UPS Shipping Zones vary for US domestic shipping and to other countries like Canada and Mexico. The shipping rate calculation also varies based on the package weights and services.

UPS has a service guide that supplies complex information. Experts in this field can understand its rules and fees. Audintel provides simplified information to shippers.By leveraging our knowledge of UPS Shipping Zones, we offer several cost-effective strategies to businesses.

UPS Shipping Zones change

UPS announced recently that the US shipping zones will change for some origin/destination ZIP code pairs from March 24, 2025. Some experts believe that these changes will affect shipping costs. However, Audintel has a different outlook towards these statements.

Our Analysis of the UPS Shipping Zone Change

We have analyzed the “ZIP code pairs/combinations” of UPS based on the March update. The changes are for some ZIP code combinations. Our analysis shows:

  • Previously, UPS had 365,000 ZIP combinations. Now, it has increased to 1,164,000. These values indicate that UPS has fine-tuned its delivery commitments.
  • Out of the 1.1 million ZIP combinations, about 54,854 sets of ZIP combinations are different. Further, 30% of these changes resulted in higher zones. But, 70% of these changes saw a decrease in Shipping Zones.
  • Packages shipped to densely populated cities in areas like New Jersey were affected.
  • Shipping packages to remote locations will be costly for businesses.
  • A higher density of packages to cities will cost less with the lowering of the shipping zones.

The outcome of Audintel’s analysis

Analysis of shipping data will help reduce shipping costs for businesses. Shipping rate changes announced by carriers need thorough scrutiny. It will help shippers make well-informed decisions. Audintel has software tools that provide shippers with data visibility. We also alert shippers regarding new surcharges introduced by shipping carriers.

UPS announced changes in new rates

UPS announced a few surcharge updates and new fees affecting shipping costs. These changes include:

  • UPS Fuel surcharge

UPS Fuel surcharges are subject to change weekly. However, from March 10, 2025, UPS has adjusted fuel surcharges for UPS Ground Domestic and UPS SurePost® services. The increase in fees is 0.5%. A fuel surcharge applied to each package can increase shipping costs. Consolidation of shipments to reduce the shipping frequency will save money.

  • Paper Commercial Invoice Services Surcharge

UPS has imposed a $10 fee for each shipment to the shipper. It is for not providing digital commercial invoices using UPS Paperless® Invoice services before UPS processing. This surcharge came into effect from March 17, 2025.

  • Check Fee and Wire Fee

For every payment done by check or wire transfer, UPS is levying a $25 fee. The fee is applicable on or after March 31, 2025. It is not for Automated Clearing House (ACH) payments.

  • Print Invoice Fee

Each shipper or payor has to pay $5 for a paper-printed UPS invoice copy from March this year.

  • Late Payment Fee

This fee will increase from 8% to 9.9% of the balance of the prior dues. It also includes previous late fees.

Companies can adopt digital payment solutions to avoid the latter three fees. Payment by ACH is encouraged as it will not attract additional charges.

Wrapping up

Free shipping helps businesses get new customers, but free return shipping has challenges. Thus, companies must optimize logistics and use carrier discounts to reduce expenses. Shippers need awareness of carrier fees, which can lower shipping costs. Shipping carriers like UPS announce updates to their customers about the changes in fees and surcharges. In addition, businesses have to face UPS off-cycle changes in their shipping zones and fees. Thus, it is vital that shippers review their carrier contracts and pricing regularly.

Audintel aids shippers in analyzing carrier contracts regularly. Our team members have worked for leading shipping carriers, so they know the intricacies of contract negotiations. Our carrier pricing data analytics can navigate the complexities of UPS Shipping Zones. We calculate shipping costs for businesses based on the complex carrier rates.

To learn more about how UPS Shipping  Zones will affect costs, contact us at
 +1 (619) 354 8539. In addition, visit our Audintel website for information about our AI-enabled audit services, that can be customized to your business needs.

UPS and FedEx 2024

GRI 2024: Effects and comparison between FedEx and UPS GRIs

by BlogTSM

The holiday season is here. It’s the time for shipping carriers to announce their General Rate Increase (GRI). Major shipping carriers like FedEx and UPS have already announced the GRIs for 2024. Well, what does this mean for e-commerce retailers or small companies? This blog will discuss the concept of General Rate Increase, its impact on businesses, and the strategies adopted by them. Further, we give a comparison of FedEx and UPS rates for 2024.

General Rate increase

General Rate Increase or GRI is the annual percentage increase in shipping rates by shipping carriers. This rate hike is across all services offered by parcel and freight carriers. GRIs announcement is usually in the fall of the previous year. The percentage hike is generally between 4-6%. The GRI announcement allows businesses to plan the shipping costs of their packages.

Many factors influence GRI, like labor shortages, operating costs, and insurance. In addition, rising inflation, market demand, supply chain disruptions, and government regulations can influence GRI. Moreover, various challenges to shipping carriers’ distribution networks have influenced GRIs this year. Shipping carriers mention service enhancement, technology innovations, and fleet maintenance for the annual General Rate Increase. These rates vary between shipping carriers. Understanding the GRIs of different parcel carriers is essential for shippers to manage shipping costs.

GRI: its significance in the shipping industry

Companies with domestic and international shipments can’t take rising GRIs lightly. The shipping rates also include surcharges or value-added services. In addition, the fees of different shipping carriers rise annually. Companies can calculate shipping costs based on service levels, distances, package weights, etc. The increase in shipping rates is responsible for the rise in shipping costs to various destinations. Shippers have to plan their shipments according to the impact of GRIs.

Impact on General Rate Increase on shippers’ packages.

GRI percentage is higher for packages going a longer distance. Moreover, express packages or air freight rates are high. Usually, GRI is more economical for ground packages than express ones.

The impact of GRI is less for companies that have negotiated a rate cap in their shipping contracts. They can further ask for discounts from the shipping carriers. However, companies with no contracts pay extra with the rise in GRIs annually. However, the rate cap does not apply to surcharges.

Our earlier blog has discussed about impact of GRI. Here, we will discuss the new shipping rates in 2024 of the premium big carriers, FedEx and UPS.

Comparison between FedEx and UPS rates

FedEx GRI will come into effect from January 1, 2024. UPS GRI will be effective from December 26, 2023. GRI varies from the surcharges or value-added services levied by FedEx and UPS.

The U.S. domestic, export, and import services, FedEx Express shipping rates have increased to 5.9% on average, as per the FedEx website. According to the UPS website, the rates have increased to 5.9% for UPS Ground, air, and international services. Both FedEx and UPS claim that GRI 2024 is lower than last year’s GRI. However, their demand surcharges for the holiday season are moving northwards. These rates also do not include fuel surcharge.

The annual rate guides of FedEx and UPS help shippers decide their shipping strategies. We will try to understand the figures in service and preview rate guides for 2023 and 2024.

  • Daily rates of UPS and FedEx

The UPS service guide consists of the domestic daily rates for packages weighing 1 lb to 150 lbs within 49 contiguous States. Daily rates for packages weighing less than 150 lbs for international shipments are under different UPS Worldwide, UPS Standard from Canada and Mexico, export, and import headings.

The UPS service guide contains domestic rates for services like UPS Next Day Air Early, UPS Next Day Air, UPS Next Dy Air Saver, UPS 2nd Day Air A.M., UPS 2nd Day Air, UPS 3 Day Select, UPS Ground for shipping Zones 2-8 within the 50 states. Chart 1 compares between 2023 and 2024 daily rates for the UPS express and UPS ground package delivery services.

Chart 1: UPS list rates

Chart 1 will focus on list rates of : UPS packages of 1 lb within the U.S. daily rates for services in Zone 102 (Next Day Air), Zone 202 (2nd Day Air), Zone 2 (Ground), Zone 242 (2nd Day Air A.M.) for Destination ZIP codes starting with 004-005. For further details on all the daily rates of UPS, check their website.

FedEx service guide provides information about the list rates of FedEx Express packages within the U.S. and the international package rates for export and import. The guide consists of the FedEx ground rates within the U.S. and Canada. UPS Ground and FedEx Ground services are cheaper than Express Services.

The FedEx U.S. express packages cover FedEx First Overnight, FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day A.M., FedEx 2Day, and FedEx Express Saver services. It includes Zones 2-8 in the contiguous U.S. for packages weighing less than 150 lbs. Further, Chart 2 covers the U.S. express packages of 1 lb in Zone 2 (within 150 miles) across service levels, including Ground. It compares the 2023 and 2024 rates and their GRI percentages.

Chart 2: FedEx list rates

Chart 2 will focus daily rates of FedEx packages of 1 lb within the U.S. for services in Zone 2. For further details on the service levels of FedEx, check their website.

Shippers can explore the services that deliver their parcels faster and economically. Further, companies can explore the list rates of other services to suit their shipping needs.

  • Surcharges or Value-added services offered by FedEx and UPS

Alternatively, companies know about the surcharges levied by FedEx and UPS every year. Below Charts (3 and 4) compare FedEx and UPS surcharges for 2023 and 2024.

The value-added services of UPS will be effective from December 26, 2023. Domestic charges like additional handling, address correction, delivery area surcharge, remote area surcharge, Pickup fees, and more have seen an upward trajectory. The below chart 3 gives an overview of a few value-added services from 2023 and 2024.


Chart 3: UPS Surcharges

UPS website gives information in detail about the value-added services and other charges. In addition, it also provides the changed zip codes, where the delivery area surcharge is in 2024.

According to the FedEx authorities, there will be an assessment of Additional Handling charges and Oversize charges of packages for multi-piece international shipments. FedEx Ground and Express services will face an increase in surcharges from January 1, 2024. The customs clearance service fees on imports are also increasing in 2024.

Chart 4 depicts the increase in the percentages of surcharges in 2024 compared to 2023.

Chart 4: FedEx surcharges

Zones 3-4 also include  U.S. Ground Zone 22 (Intra-Alaska), U.S. Ground Zone 14 (Intra-Oahu), and U.S. Express Intra-Hawaii.

FedEx freight shipping charges are also changing from January 1, 2024.

Not just the daily rates, companies are facing the brunt of high demand surcharges and fees levied by UPS and FedEx. Businesses need to devise shipping strategies to circumvent the impact of increasing GRIs year-on-year (YOY).

  • Effect of Minimum Charges and the necessity of rate caps

Minimum charges are the lowest fees a shipper will spend on any package. Carrier package minimum charges are the fees for a Zone 2 one-pound package. Minimum charges apply to shippers even if they have existing discounts.

Chart 5 compares the UPS Minimum Net Charges for some services in 2023 and 2024.

Chart 5: UPS Minimum Net Charges for package with 1 pound weight for UPS Ground – Zone 2, UPS Next Day Air-Zone 102, UPS 2nd Day Air- Zone 202, UPS Next Day Air Saver – Zone 132

Fedex sets minimum charges for all services. It is usually for a Zone 2 one-pound package for all services. The comparison between the services in 2023 and 2024 is in Chart 6.

Chart 6: FedEx Minimum charges for zone 2, 1-pound packages

Shippers can get discounts on low-weight packages with FedEx minimum change reductions in their contract agreements.

Moreover, companies with rate caps can limit any increase to a value close to a negotiated rate cap. Hence, companies must include rate caps in their contract negotiations to keep rate increases in check.

Ways to offset the impact of GRI on businesses

It’s not possible to avoid the impact of GRI on businesses. However, there are ways to reduce shipping costs effectively. A few ways to offset the GRI impact are:

  • Negotiations

Shippers can revise their contracts if they have not renegotiated for many years. Further, parcel carriers face competition from new entrants and fluctuating shipping volumes. It gives shippers a chance to negotiate for better shipping rates. 

  • Intelligent use of shipping data

Companies can use their historical shipping data to plan their shipping strategies. The data helps shippers understand their shipping operations. A deep knowledge of the shipping profile, service levels, distance, and package weights helps keep shipping costs down.

  • Diversifying carrier network

Shippers can use alternative carriers, regional carriers, and postal services at competitive rates. Packages can be sent to various locations easily through different shipping carriers. It helps in reducing the impact of shipping rates substantially.

  • Focus on packaging

Oversize packages are expensive to ship for companies. So, shippers have to focus on packaging goods to minimize space and save money.

Conclusion

Businesses need to understand the different aspects of GRI. In addition, its impact on shippers’ shipping profiles will help companies reduce shipping costs. Conducting an audit of the shipping operations allows companies to negotiate better with shipping carriers. Further, partnering with Audintel gives shippers valuable insights into their shipping profile. It helps them to prepare cost-effective shipping strategies to reduce GRI impact.

About Audintel

Audintel is a technology-first and customer-focused organization that optimizes logistics and shipping costs. Our trustworthy solutions help clients gain deeper insights into their logistics spending. For more information about GRIs and their impact on your business, contact us at +1 (619) 354 8539 or visit our Audintel website.