Topics: Parcel shipping, Parcel Spend Management, Freight Rates
Summary
FedEx and UPS each announced a 5.9% General Rate Increase (GRI) for 2026, the same headline number we saw for 2025 and 2024. But there’s more to the GRI than meets the eye; planning your 2026 shipping budget requires more than expecting a 5.9% increase across the board—for two reasons.
Firstly, surcharges and accessorial fees often increase at higher rates compared to base rates, so calculating your 2026 budget means accurately factoring in the various rate changes of each type of added fee.
Secondly, if 2026 is anything like 2025, we can expect to see off-cycle rate adjustments that can have a significant impact on overall shipping spend. These adjustments appear to be an emerging strategy for FedEx and UPS, and shippers will need a plan for how to handle them when they come—because for many, these off-cycle adjustments are uncharted territory.
Recap of 2025
FedEx’s and UPS’s 2025 headline GRI announcement was 5.9%, the same as the year before. The announcement covered the typical surcharge increases that hover slightly over the headline GRI, but it also included a few exceptionally steep ones: Additional Handling and Oversize fees, which increased by more than 25% across every zone.
This was a case study in why shippers can’t take the announced 5.9% GRI at face value. An example package in 2024 could incur costs of $39.95 for Transportation, $27 for the Additional Handling Surcharge, and $3.95 for the Delivery Area Surcharge, for a total of $70.90 to ship. If the shipper fell into the oversimplification trap, they might assume the shipping cost for the same package in 2025 would increase to only $75.08, that is, a 5.9% increase. However, Transportation, Additional Handling, and Delivery Area Surcharge costs increased by 5.9%, 25.93% and 6.33%, respectively, for a 13.55% increase to the total shipping cost—more than twice the 5.9% that the shipper was expecting.
Even when shippers were informed and aware of the true impacts to their shipping budgets, what shippers weren’t expecting in 2025 were off-cycle adjustments. We saw costly changes to fuel surcharges, late payment fees, payment processing fees, over maximum limits fees, the expansion of Delivery Area Surcharge-applicable ZIP codes, and new rules for rounding up measurements for package dimension.
Shippers weren’t considering the potential for these adjustments when they signed their contracts, but now we’ve seen how carriers are free to capitalize on a few generic lines in most customer contracts.
What Does This Mean for 2026?
The first step is for shippers to ensure they’re calculating accurate shipping spend increases by applying base rate and surcharge increases individually. Fortunately, for 2026, the announced surcharge increases are more modest compared to 2025, ranging between 5.36% and 7.56%, depending on zone and package characteristics. This is a welcome break from the select 25%+ increases of 2025, but shippers should also be prepared for the pattern of off-cycle adjustments to continue in the year ahead. The addition of new fees, redefined thresholds that capture more packages, and incremental surcharge increases throughout the year are all on the table. Any of these would drive costs higher and do so with less attention from shippers compared to the yearly GRI.
The Bottom-Line Impacts of Mid-Cycle Adjustments
For carriers, frequent off-cycle adjustments are an effective tool to protect profitability, squeezing shippers at times of the year when they’re not trying to make changes to their shipping strategy. Carriers get the benefit of flexibility, on top of avoiding alarming customers at the end of the year with the announcement of larger percent increases; two smaller percent increases could be more palatable.
But running the numbers shows how these increases can add up.
Take another example package. This one cost $77.47 to ship at the end of 2025—$36.22 for Transportation, $36 for Additional Handling, and $5.25 for the Delivery Area Surcharge. According to the GRI announcement details, the package becomes 6.2% more expensive to ship at the beginning of 2026—Transportation, Additional Handling, and Delivery Area Surcharges increase by 5.5%, 6.9%, and 5.7%, respectively—for a new shipping total of $82.26.
Even without any off-cycle changes, the total cost increase (6.2%) already exceeds the 5.9% GRI average.
Now consider the impact if the carrier were to announce a 2% off-cycle adjustment to the Additional Handling Surcharge in March 2026. This surcharge would go from $36 (H2 2025) to $38.50 (H1 2026) to $39.27 (H2 2026). The surcharge’s two separate increases (6.9% and 2%) would amount to a 9.1% increase from H2 2025 to H2 2026.
In these scenarios, a single off-cycle adjustment turns what was initially a 6.2% shipping cost increase into something more substantial—and this is without any new surcharges or expanded definitions that could add even more cost pressure on the shipper.
What Can You Do to Prepare?
It's time to dive into the numbers. While many shippers are unprepared for the changes coming, those that already have tools for understanding their shipping spend will be in a better position, being able to make informed decisions and implement smarter strategies.
Understanding must start with data—breaking down every cost for detailed analysis. With this analysis, shippers can track individual charges, monitor trends, and identify opportunities to save. This is the value Cass provides.
We'll help you fully understand your data and make informed decisions to optimize costs and service. Partnering with us gives you access to powerful reporting, interactive dashboards, and scenario planning tools, along with invoice audits to ensure you’re only paying what you owe, even when dealing with complex changes.
To get prepared for parcel increases in 2026 and beyond, reach out to us to optimize your parcel spend and stay ahead of rising costs.
