Shipping rate changes in 2021 and how to prepare for that

Wednesday, March 3, 2021 - 4 min read

2020 is an extraordinary year with many surprises and unpleasant events that create permanent impacts on e-commerce shipping. It was a fear that the shipping would plummet after March when many countries start to close, however, it did not happen. April saw a significant decrease but it has made a quick rebound after that. 2021 will be a year full of promising news along with potentially unfortunate events in the shipping industry. Let’s see the shipping rate changes of the major shipping carriers and arm yourself with the best shipping strategies in 2021.

#1 UPS (United Parcel Service)

1. Higher shipping rate of UPS effective since December 2020.jpg

Higher shipping rate of UPS effective since December 2020

UPS has published the shipping rate for 2021 since December 27, 2020, specifically, the general rate will be increased by 4.9% affecting shipping surcharges, fees as well as overall shipping cost.

#2 USPS (United States Postal Service)

2. USPS shipping rate change in 2021.jpg

USPS shipping rate change in 2021

The change of USPS shipping rate has been effective from January 24, 2021. In which the Priority Mall increases 3.5%, Parcel Select increases 4.9%, the biggest increase is 6.5% for First-Class Package while Priority Mail Express has slight growth in price at about 1.2%. In addition, the retail prices of USPS service also see a major increase in 2021 at about 4.9% on average.

#3 DHL Express

3. DHL Express ups average price rate to 4.9_.jpg

DHL Express ups average price rate to 4.9% for 2021

An increase in shipping rate at 4.9% has taken effect since January 1, 2021, which is announced to be applied to all DHL Express Worldwide shipping services. The shipping cost is increased on an annual basis of the company, inflation, and administrative costs, says DHL Express.

#4 Canada Post

4. Canada Post increases shipping rate at the beginning of 2021.jpg

Canada Post increases shipping rate at the beginning of 2021

The new price of Canada Post applied to the increase of 3.9% for domestic shipping and 1% for international shipping took effect on January 11, 2021.

#5 FedEx

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FedEx 2021 rate increase

Similar to the other major carriers, FedEx also prepared a detailed schedule of a shipping rate change for 2021. FedEx Freight rates apply the rise of 5.9% while FedEx Express, FedEx Ground rates and others have an average increase of 4.9%,

How to deal with shipping rate changes?

There are ways for every shipping strategy to keep your business profitable despite the higher shipping rate.

Free shipping:

  • Increasing product prices can be a good choice to cover the shipping cost, however, this might have an effect on the shopping frequency of your constant customers.
  • Minimum free shipping: the increased amount of shipping can be harmonized and passed to your customers.
  • Continuing to use a free shipping strategy: that requires you to carefully review the profit margins to stabilize your revenue.

Flat rate shipping:

  • Balance order value range: you can set a flat rate for each order, for example, the higher flat rate can be used for small orders and the lower rate for bigger cart sizes.
  • Increase product price: your profit margins and a flat rate of shipping can be kept and higher product prices can compensate.
  • Increase shipping price: it sounds good when the general shipping cost goes up but the cart abandonment rate can be higher if your shipping cost does not satisfy customers.

Calculated shipping rates:

If you are offering calculated shipping rates, it can be a chance to boost sales. In the context of higher shipping rate, you might use a calculation software or application which are embedded with the 2021 shipping rate change, then you don’t have to take any action even though the shipping cost fluctuates. Or because the shipping rate is higher, you can slightly reduce the product price to keep the total cost the same.

Shipping rate and shipping strategies have a crucial role in the e-commerce business, it is not only 2021 when the changes happen, you’d better also keep up with this change every year.