The impact of rising carrier fees – and how retailers can stay competitive

With major carriers increasing rates, here’s how US brands can cut costs, maintain speed, and protect margins.

Shipping costs are climbing - again.

For many US retailers, 2025 started with a familiar headache: rate increases from major carriers like FedEx, UPS, and USPS. General Rate Increases (GRIs), fuel surcharges, residential delivery fees, and peak surcharges are stacking up. And while eCommerce continues to grow, profit margins are being squeezed tighter.

At fulfilmentcrowd, we work with fast-growing brands around the world. And while we can’t stop carrier price hikes, we can help you rethink your shipping strategy to stay ahead. Below, we’ll break down what’s changing, why it matters, and how you can respond without sacrificing speed or service.

What’s happening with carrier fees?

Most major couriers in the US have raised their rates again in 2025. Here are a few key changes:

General Rate Increase Overview

Other Increases

For growing eCommerce brands, these cost increases can have a significant impact, especially when customers still expect free and fast delivery.

The pain point: Balancing cost and customer expectations

Today’s shoppers expect two things:

• Fast shipping

• Affordable (or free) shipping

And they rarely want to compromise on either.

But behind the scenes, retailers are facing growing pressure. When carriers raise rates, it hits the bottom line, especially for brands offering flat-rate or free shipping promotions. To protect your margins, you need to find smarter ways to fulfill orders that don’t compromise the customer experience.

Three ways to offset rising shipping fees

Here’s how US brands can rethink their fulfilment and shipping strategies to stay cost-effective, even as fees rise.

1. Distribute inventory across multiple fulfillment centers

The farther a package travels, the more it costs to ship. That’s especially true with zone-based pricing from carriers like FedEx and UPS.

By distributing your inventory across multiple fulfillment centers, you can:

• Shorten last-mile delivery distances
• Reduce the number of higher-cost zone deliveries
• Speed up delivery times without using premium services

At fulfilmentcrowd, we offer distributed fulfillment across our global network, including US-based centers. We work with you to strategically place inventory based on customer demand, so you can reduce shipping zones and keep costs down.

2. Use smart shipping rules to avoid premium fees

Many brands default to fast shipping options across the board, even when it's not necessary.

By using data-led shipping rules, you can:

• Offer economy or standard delivery for lower-value orders
• Automatically select the most cost-effective carrier based on destination, weight, and delivery window
• Avoid unnecessary surcharges for Saturday delivery or oversize packages

Our platform gives you the ability to apply rules based on real-time order data, so you can automate smarter shipping decisions without manual input.

3. Consolidate orders and optimize packaging

Shipping costs are increasingly based on dimensional weight - meaning you’re charged for the space a package takes up, not just its weight. That makes packaging optimization critical.

You can reduce dimensional weight fees by:

• Consolidating multiple items into a single shipment
• Using custom-sized packaging or packaging algorithms
• Avoiding excessive void fill or oversized boxes

fulfilmentcrowd offers custom packaging services and uses smart pack logic to optimize every order, minimizing box size while protecting product integrity.

Bonus: Explore hybrid and regional carrier options

FedEx and UPS aren’t the only players in town. Regional carriers and last-mile providers like LaserShip, OnTrac, Lone Star Overnight, and Spee-Dee offer competitive rates in specific areas, often with faster delivery windows.

A hybrid strategy that uses major carriers for some zones and regional providers for others can:

• Lower costs in high-density metro areas
• Improve delivery speed and consistency
• Offer redundancy during peak or disruption periods
  

What brands should be doing now

If you’re feeling the pressure of higher shipping costs, you’re not alone. But brands that take action early can turn these challenges into opportunities. Here’s what we recommend:

• Audit your current shipping spend: Where are the biggest costs coming from? Look beyond base rates to fuel, surcharges, and last-mile fees.

• Identify high-zone shipments: Look at where your customers are located and where your inventory is stored. High-zone shipments often signal an opportunity for distributed fulfillment.

• Set tiered shipping strategies: Don’t overpromise across the board. Offer fast shipping on high-value or loyal customer orders, and use more cost-effective options elsewhere.

• Use tech to automate decisions: Manual shipping decisions slow down your operation. Smart automation ensures you’re always choosing the best option for speed and cost.

How fulfilmentcrowd can help

We’ve built our platform and operations to give brands full flexibility in how they fulfill, ship, and scale.

• Distributed fulfillment: Place stock in multiple locations to reduce costs and improve speed.

• Carrier integrations: We integrate with all major US carriers, including FedEx, UPS, USPS, and regional options.

• Smart shipping rules: Apply automated shipping logic to select the best carrier and service for each order.

• Packaging optimization: Lower dimensional weight fees with tailored packaging solutions.
• Transparent pricing: Our pricing model is clear and competitive, with no hidden fees.

What’s next?

Shipping costs are going up, but your profit margins don’t have to go down. With the right strategy, you can maintain the fast, reliable delivery experience your customers expect, without absorbing every carrier rate increase.

At fulfilmentcrowd, we’re here to help you stay ahead. Whether you’re a fast-growing DTC brand or scaling an established operation, we’ll work with you to make fulfillment and shipping one less thing to worry about.