How to Mitigate the Impacts of the Parcel Carrier General Rate Increase

Each year, parcel carriers announce an average general rate increase that appears manageable on paper. However, business shippers may see their invoices increase far beyond the published figure. This disconnect exists because the published increase reflects a statistical average, while your invoice reflects how pricing rules interact with your specific shipping profile.

Costs typically increase when you factor in growth and inflation. Shipping more volume increases spend, while rate inflation raises the cost per package. When you consider these factors together, it can be challenging to identify what changed, leading to the impression that higher costs stem from business growth. The announced average also excludes other adjustments, including surcharges and zone changes.

When you apply data-driven insights to rate increases, you can manage their impact. Below are 6 ways to mitigate the impacts of the parcel carrier general rate increase.

1. Calculate Your Effective Rate Increase

At the beginning of the year, parcel carriers, such as FedEx, announced a 5.9% average increase, but actual courier inflation can range from 9% to 11%. This difference emerges because the rate glosses over how surcharges and service mix affect individual shippers.

One way to mitigate the impacts of the parcel carrier general rate increase is to understand how your effective increase compares to the announced one. The process involves separating volume-driven spend from rate-driven spend. A disciplined analysis examines historical shipment data and helps you understand what the current shipment would cost if the previous year’s pricing rules still applied. This comparison removes volume from the equation and surfaces an accurate inflation rate for a package.

Within your analysis, consider:

• Surcharges: Residential delivery fees and other accessorial fees and concessions are added to the published GRIs. When these charges increase simultaneously, they compound, pushing effective rates upward.
• Service types: Changes in service selection, such as a higher share of residential deliveries or longer average zones, raise costs even when shipment counts remain steady.
• Package dimensions: Dimensional pricing can amplify inflation when divisors or thresholds tighten. Shipments that previously rated favorably may be moved to higher billing tiers, increasing spend per package.

Parcel cost management and auditing provide structure to this analysis. By consolidating shipping data across carriers, these tools calculate your true effective rate increase and highlight where pricing diverges from expectations. Once you’ve isolated inflation drivers, you can implement targeted corrections to maximize saving opportunities.

2. Audit Every Invoice for Rule Change Penalties

After carriers adjust base rates, they often refine the rules that determine which shipments qualify for those charges. For example, the underlying rate base structure may be altered by tightening dimensional definitions or realigning ZIP code zones. Each adjustment introduces new accessorial fees that are applied automatically during billing, even though the shipment may appear unchanged from an operational standpoint.

These rule changes are exclusive of the published GRI. A package that cleared an oversized threshold in the previous year may now trigger additional handling charges, while a destination that previously fell within a standard zone may now fall into a higher-cost delivery area. Individually, these adjustments appear incremental, but when you consider thousands of shipments, the impact on spend increases.

Rule changes also introduce billing complexity. When carriers update rating logic in their billing systems, discrepancies can emerge between agreed contract terms and how invoices are generated. If a shipper identifies overcharges due to these discrepancies, they might opt for short pay/ment rather than paying the full invoice amount. Extension errors — basic mathematical mistakes — can also lead to incorrect billing when waivers or caps no longer apply consistently as new pricing rules take effect.

Freight bill auditing allows you to validate charges before you pay invoices. The audit evaluates shipment-level detail against contracted terms and current carrier rules, supporting several outcomes, including:

• Verification of surcharge accuracy: Each accessorial fee is reviewed to confirm it aligns with contract definitions and thresholds. The audit specifically checks for common discrepancies, such as whether the correct fuel surcharge was applied, the proper discounts were honored, the correct minimum charge was applied, and whether Freight All Kinds (FAK) was applied properly, if applicable.
• Identification of systemic issues: When the same discrepancy appears across multiple invoices, the data flags an issue. This allows you to address root causes.

3. Use Benchmarking Data to Renegotiate Mid-Contract

Shippers may consider contract expiration as the best time to renegotiate terms. Yet, parcel pricing changes throughout the contract life cycle. When carriers introduce material pricing shifts via GRIs or new or revised surcharges, the economics of the agreement change as well.

Mid-contract renegotiation works best when based on evidence rather than frustration. Pricing discussions may gain traction when you demonstrate that your effective rates are above prevailing market levels for comparable shipping profiles.

Carrier rate benchmarking can help you compare your rates against data from similar shippers. It reveals whether your pricing reflects market norms or deviates from them in specific areas. Effective benchmarking supports renegotiation in the following ways:

• Focuses on high-impact gaps: Rather than reopening the entire contract, you can concentrate on lanes, services or surcharges where rates diverge from market averages.
• Aligns pricing and profile: As your shipping mix evolves, benchmarking helps recalibrate rates to match current characteristics.

4. Diversify Your Carrier Mix to Reduce Regional Costs

Relying on a single national parcel carrier simplifies operations, but it leaves you vulnerable to pricing risk. National carriers apply zone-based pricing models that amplify cost exposure when carriers redefine zones or when delivery area surcharges expand. When these changes occur, shippers with a sole-source strategy feel the impact across their entire network.

Regional parcel carriers can waive or reduce delivery area surcharges for local or extended zones. For shipments operating within dense metropolitan regions or over shorter distances, regional carriers may offer comparable transit times while maintaining stable pricing.

Logistics consulting teams support the diversification process by modeling alternative carrier scenarios using historical shipment data. These models evaluate cost, impact to your earned discounts (and if a restructure is required for the diluted volume), and transit performance across carriers before any operational changes occur.

5. Optimize Packaging to Neutralize Dimensional Weight Hits

Dimensional weight adjustments are some of the techniques carriers use to increase revenue during GRIs. When carriers revise the dimensional divisor, the same carton can incur a higher billable weight, even though the physical shipment remains unchanged.

Packaging optimization helps shippers understand how dimensional weight correlates with carrier pricing thresholds. Shippers can consider dimensional changes to control costs. For example, reducing the dimension by a few inches may move a shipment into a lower pricing tier, decreasing billable weight and associated surcharges across thousands of orders.

Business shippers can also partner with a supply chain consulting team to analyze shipment data and identify potential risks. This analysis factors in various carrier pricing rules to identify specific opportunities for adjustment. When shippers combine this strategy with freight bill audit and pay solutions, they can validate packaging changes on invoices, confirming that theoretical savings can translate into actual cost reductions.

6. Implement Least Cost Routing Automation

Some parcel networks still rely on a default carrier for most shipments. This approach feels efficient, but it can conceal cost differences across carriers and services. Least cost routing addresses this gap by shifting decision-making from habit to data. Instead of assigning shipments based on static rules, you can evaluate routing decisions using shipment characteristics and real-time pricing inputs.

Transportation management software (TMS) can make least cost routing operationally feasible. By integrating with order management and carrier systems, TMS provides real-time analytics that compare cost and transit outcomes across carriers, helping reveal patterns that support broader network optimization.

Mitigate the Impact of Parcel Carrier General Rate Increase With Broussard Logistics

Parcel rate increases will continue to influence shipping economics, but their impact depends on how they are managed. Broussard Logistics has over 40 years of experience helping companies manage, control and lower freight costs.

We provide a wide range of services, including consulting, parcel auditing, contract optimization and benchmarking to help you understand how pricing changes affect your specific operations. Less-than-truckload (LTL) contract optimization and TMS are available as complementary add-ons to our post-audit services.

Our approach is hands-on and personal. You can reach out to our leadership team, including the company president. Contact us today to discover how you can mitigate the impacts of the parcel carrier general rate increase.