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FedEx & UPS have increased their shipping costs again this year:

FedEx announced a net increase of 5.9% which took effect Jan 7, 2013 covering parcels weighing up to 150 pounds through Fedex Home and Fedex Ground. (View official announcement here)

UPS announced a 4.5% hike on UPS Air and International Services and a 4.9% hike on UPS Ground Services, effective Dec 31, 2012. (View official announcement here)

Beware, the increase could be bigger than you think

Ken Wood, president of shipping advisory firm LJM Consulting, notes that the lighter the package, the higher the rate increase. And because most online retailers ship packages of 30 pounds or less, their average rate increase will run higher than 4.9%, he says. "Overall, most e-commerce retailers will have a rate increase of about 7% or 8%,” he says,” reports InternetRetailer.com.

What this means

You need to look into how much these increased will affect your bottom line and act accordingly, either by increases shipping prices (the most obvious solution) or by earning the extra expenditure back via other means, such as product price increases.

If you are currently offering free shipping in your ecommerce store (which is one of the most effective sales tactics) such as ‘free shipping for all orders over $50’, consider increasing that to $60.

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