Shipping Costs Are Soaring—But FedEx and UPS Are Offering Bigger Discounts
- Mar 7
- 1 min read
As shipping costs continue to rise, some shippers are finding unexpected savings. Recent industry data reveals how FedEx and UPS are increasing discounts to stay competitive in a high-cost shipping environment.
In Q4 2025, both carriers expanded parcel delivery discounts following slower activity in previous quarters. Ground shipping discounts primarily benefited small and medium-sized businesses, while larger shippers saw stronger pricing on express services.
Despite these concessions, shipping costs remain elevated. Ground delivery rates are now 34.1% above the January 2018 baseline, while express rates are 5% higher, largely driven by peak-season and residential surcharges.
Looking ahead to Q1 2026, rates are expected to rise further. However, both carriers remain open to negotiating discounts—especially for strategically valuable shipping volume.
As costs climb, FedEx and UPS are increasingly targeting SMB shipments, using discounts as a key strategy to win market share as more businesses consider switching carriers to reduce shipping expenses.