New Year, Same Parcel Rate Increases. Take Control with Redwood.

It’s not even close to February, but it feels a little like Groundhog Day right now. Just as Bill Murray relives the same day over and over in the classic movie, the parcel industry is seeing the same familiar 5.9% annual general rate increase (GRI) announcements from the big carriers for 2026. Again. Just like 2025. And 2024.  

FedEx announced its 2026 GRI of 5.9% back in September. On 10/30, UPS published its own new rate schedule for 2026, mirroring its rival’s GRI of 5.9%, along with a slew of new surcharges. While the FedEx rate increase is effective on January 5, 2026, UPS rates go up on December 22, 2025, the earliest any carrier has introduced an annual rate change.  

That means UPS is ending this year, which saw nearly 20 midyear rate adjustments, by adding new fees on top of its 2025 peak season surcharges. 

Starting in January, both UPS and FedEx will expand how they define Additional Handling and Large Package/Oversize surcharges by adding a cubic volume component. This change means more shipments will qualify for these surcharges, increasing most shippers’ overall costs. 

Like FedEx, UPS has made its objective clear: to streamline its own supply chain, increase internal efficiency. and protect its profit margins. New fees and surcharges are aimed at large, hard-to-handle packages, international shipments, and brokerage and late payment fees. To make account administration easier, UPS is also pushing shippers toward electronic invoicing for both incoming and outgoing freight.  

What do the 2026 rate adjustments and surcharges from both UPS and FedEx mean for your business? Honestly, it’s hard for the vast majority of shippers to tell. In the end, the impact of all these changes depends on each shipper’s unique profile in terms of package size and weight, cubic volume, delivery distance, urgency, service used, customer expectations, and other characteristics.  

Let’s be honest. Most parcel shippers are facing dozens of other priorities and simply don’t have the time, or internal resources, to dive into carriers’ complex rate schedules. The big carriers are most likely betting that customers will see the 5.9% rate increase, think “business as usual,” and continue working with them in the new year. But maybe this year carriers are betting wrong.  

It’s Time to Flip the Narrative  

If you lack the expertise to sort out the complexities of the new UPS rate schedule, as well as compare it with FedEx and other carriers, we have great news for you. Redwood’s dedicated Parcel Advisory team is here to help. 

While FedEx and UPS raised their fees in 2024, that same year Redwood achieved these results for our parcel customers: 

• An average reduction of 16% in the overall parcel spend
• A typical cost savings of $1.1 million
• More favorable carrier contracts in just 43 days 

After three consecutive years of a 5.9% GRI from both UPS and FedEx, it’s time for shippers to change the narrative—and take back control of their parcel spend.  

The big carriers are hoping you don’t have the time or resources to analyze their fees, match them to your own shipping behaviors and package sizes, and make more intelligent choices in the new year.  

Redwood: The Expertise You Need, Delivered Flexibly 

As a modern 4PL, Redwood delivers comprehensive Parcel solutions and services aimed at helping you master the complexity of all those complicated rate schedules and surcharges.  

Redwood Parcel offers a range of capabilities that can be customized to your unique challenges, constraints, opportunities, shipping patterns, costs, customer service demands, and risks. While our solutions and services are diverse, they’re all focused on one objective: saving you money. 

With an expert team composed of former national carrier employees and leadership, Redwood delivers these and other value-added Parcel Advisory services on a flexible, as-needed basis:  

• Contract negotiation coaching. FedEx, UPS, and other large players have a published rate schedule, but it’s essential to recognize those rates are still open to negotiation. Redwood’s experienced Parcel Advisory team helps you understand and leverage your own power—and, often, achieve big savings on published rates.
• Invoice and payment audits. Most shippers are far too busy to dig into the granular details of their carriers’ invoices and their own payments. Redwood’s analysts routinely find errors that lead to big credits for shippers. Chances are, you have unclaimed carrier credits out there that are just waiting to be discovered.
• Process innovation and best practices. Are your parcels just oversized enough to fall into a surcharge category? Can you minimize packaging or use new strategies? Can you use zone-skipping to avoid expensive ZIP codes? Redwood Parcel Advisory knows exactly how to make small, innovative changes that deliver a big savings impact.
• Ongoing business analysis and intelligence. As your products, your business, and your customers’ needs evolve, Redwood helps ensure you’re always using the right carrier mix and shipping strategies. Parcel shipping optimization isn’t a one-time event, but a continuous process of monitoring carrier rates, market conditions, and your own evolving business model.
• Carrier mix optimization. Maybe you’ve always relied on FedEx or UPS. But maybe it’s time to make a switch. If your shipping patterns and package sizes fall outside the big carriers’ own priorities, investigate regional carriers and create a more optimized match. Redwood introduces you to new, vetted carriers you might not have considered. 

Business as Usual? Why Not Business on Your Terms? 

UPS and FedEx might be stuck in a continuous loop of 5.9% GRIs and confusing new surcharges. But that doesn’t mean you have to blindly accept their pricing or service models. There are a world of parcel shipping options out there, and Redwood knows how to leverage them to minimize your spend, while maintaining the service levels your customers expect. 

With an average customer savings of $1.1 million on parcel shipping, you have nothing to lose and everything to gain by partnering with Redwood. Contact our expert team today, and let’s break the endless rate-increase cycle.