UPS and FedEx international express rates may drop to 1.4% in the fourth quarter

In the third quarter of 2024, the two giants in the logistics industry - UPS and FedEx - actively implemented transportation discount strategies to compete for market share. This strategy unexpectedly led to a decrease in express package rates.

According to the TDCowen/AFS Freight Index, the rate per package for express delivery in the third quarter increased by 20.3% compared to the baseline in January 2018, which is the lowest point since 2021. The discounts for large-scale customers were particularly evident in the third quarter, with an average discount per package increasing by 2.4% from the second quarter to the third quarter. At the same time, the net fuel surcharge per package rate has decreased by 6.8%, and even small customers can now enjoy some fuel surcharge discounts.

Especially, the express parcel rate has decreased from 4.5% in the second quarter to 1.6% in the third quarter, and is expected to further decrease to 1.4% in the fourth quarter. This indicates that in order to maintain competitiveness in a fiercely competitive market, both companies are actively adjusting their respective tariff strategies.