The short answer: you negotiate better FedEx and UPS rates by knowing your shipping data, asking for discounts on the charges that actually drive your bill (not just base rates), and using real market leverage. Most businesses that negotiate with an expert save an average of 30% on their carrier rates, and some save 50% or more.
If you ship $100k or more a year, you almost certainly qualify for better pricing than you have today. Carriers rarely offer their best rates up front. They offer them to shippers who come prepared.
This guide walks you through exactly how to negotiate shipping rates with FedEx and UPS, what to ask for, and the mistakes that cost businesses thousands every year.
FedEx is raising its rates by an average of 5.9% on January 4, 2027. It is the fourth year in a row FedEx has set its general rate increase (GRI) at 5.9%, and UPS has matched FedEx in each of the past several years.
That 5.9% is only the average. Many shippers will pay more than that, because the increase is not spread evenly:
If you do nothing, your shipping costs go up automatically every January. Negotiating is how you stop that from happening.
Sources: Supply Chain 24/7, The Loadstar, ShipAid
Carriers price your account based on your shipping profile, so you need to know it better than they do. Pull at least 12 months of invoice data and look at:
This is your leverage. A carrier will offer better rates to a shipper who clearly understands their own volume.
Most FedEx and UPS agreements include tiered discounts, earned discounts tied to your weekly spend, minimum charges, and a dimensional (DIM) weight divisor. Many businesses have never read theirs closely. Know what you have before you ask for more.
This is where most shippers miss savings. Base rate discounts get the attention, but surcharges and fees often make up a large share of your bill. Ask about:
Carriers sharpen their pricing when they know they could lose your business. Get proposals from both FedEx and UPS, and consider regional carriers for certain zones. Even if you stay with your current carrier, a competing offer gives you leverage.
The best moments to negotiate are before a general rate increase takes effect, when your contract is up for renewal, or when your volume has grown. With the 2027 increase starting January 4, now is the right time.
Make sure every discount, surcharge concession and term is written into your agreement. Ask how annual rate increases will apply to your account, and plan to review your rates every year.
A better agreement only saves money if your invoices match it. Expert invoice auditing catches overcharges and billing that does not match your contract. Late shipments can also qualify for refunds, which add up quickly when someone tracks them for you.
Negotiating carrier rates takes time, data and experience most businesses do not have in house. Very rarely do businesses that negotiate on their own get the savings they deserve, or any savings at all, because carrier pricing is complex and hard to fully understand from the outside. ShipPlug does it for you.
ShipPlug works with businesses shipping $100k or more a year across industries like apparel, cosmetics, auto parts, coffee, pet supply, footwear, healthcare and nutrition.
Ready to see what you could save? Book a free savings review with ShipPlug and find out how much lower your FedEx and UPS rates could be before the 2027 increase hits.
Yes. Businesses shipping around $100k or more a year usually have enough volume to negotiate meaningful discounts with FedEx and UPS.
It depends on your shipping profile, but ShipPlug clients save an average of 30% on FedEx and UPS rates, and some save 50% or more.
Before a general rate increase, at contract renewal, or after your volume grows. The FedEx 2027 increase takes effect January 4, 2027, so late in the year is an ideal time.
FedEx is raising rates by an average of 5.9% on January 4, 2027. Many shippers will see more than 5.9% because of higher minimum charges, surcharge increases and zone changes.
Surcharges, fuel discounts, minimum charges, your DIM weight divisor and earned discount tiers. These often have a bigger impact on your total bill than the base rate.
Dimensional (DIM) weight is a pricing method that bills a package by its size instead of its actual weight. Large, light boxes can cost much more than expected, and a better DIM divisor in your agreement can lower those charges.
You can try, but very rarely do businesses that negotiate on their own get the savings they deserve, or any savings at all. Carrier pricing is complex, and an expert knows what carriers will agree to and which charges matter most for your profile. ShipPlug negotiates for you at no upfront cost and only gets paid when you save.