What Are Published Rates?
Published rates — also called list rates or standard rates — are the base prices that UPS and FedEx make available to the public. These are the rates printed in each carrier’s annual rate guide and posted on their websites.
If you walk into a UPS Store or ship from FedEx.com without a business account, you’re paying published rates. They represent the maximum price a carrier charges for any given service, weight, and zone combination.
Every January, both carriers release updated published rate guides with a General Rate Increase (GRI), typically averaging 5.9–6.9% year over year. This increase is the starting point — individual services and surcharges may increase more or less than the headline number.
What Are Negotiated Rates?
Negotiated rates are discounts off published rates that carriers offer to business shippers based on their shipping volume, consistency, and competitive leverage.
These discounts are formalized in a carrier pricing agreement — a contract between your business and the carrier. The agreement specifies:
- Service-level discounts: Percentage off the published base rate for each service (e.g., 45% off Ground, 55% off Next Day Air)
- Surcharge modifications: Reduced rates on specific surcharges (e.g., residential delivery capped at $4.50 instead of $6.95)
- Minimum charges: The lowest amount billed per package, regardless of the calculated rate
- Earned discount tiers: Additional discounts that unlock as your weekly revenue reaches certain thresholds
How Big Is the Difference?
The gap between published and negotiated rates can be substantial:
| Shipper Size | Typical Discount Range | Effective Rate Reduction |
|---|---|---|
| Small (50–200 pkgs/week) | 15–30% | 10–20% effective savings |
| Mid-market (200–1,000 pkgs/week) | 30–50% | 20–35% effective savings |
| Large (1,000–5,000 pkgs/week) | 45–65% | 30–50% effective savings |
| Enterprise (5,000+ pkgs/week) | 55–75%+ | 40–60%+ effective savings |
Important: The discount percentage applies to the base transportation charge only. Surcharges, fuel, and accessorial charges are typically discounted separately — or not at all — which is why your effective savings are lower than the headline discount.
Understanding Discount Tiers
Most carrier agreements include tiered discounts based on package weight. Heavier packages get different discount levels than lighter ones:
Example: UPS Ground Discount Schedule
| Weight Range | Discount |
|---|---|
| 1–5 lbs | 42% |
| 6–10 lbs | 45% |
| 11–20 lbs | 48% |
| 21–50 lbs | 50% |
| 51–70 lbs | 47% |
| 71–150 lbs | 44% |
This structure means your blended discount depends on your weight distribution. A shipper sending mostly lightweight packages will realize a different effective discount than one shipping heavy products, even on the same contract.
Earned Discount Programs
Both UPS and FedEx offer earned discount or portfolio tier programs that provide additional savings as you hit higher weekly revenue thresholds.
How It Works
- Your weekly eligible transportation charges are totaled
- That total is compared against revenue bands
- An additional discount percentage is applied for each band reached
| Weekly Revenue Band | Additional Discount |
|---|---|
| $0–$500 | 0% |
| $500–$1,500 | 2% |
| $1,500–$5,000 | 4% |
| $5,000–$15,000 | 6% |
| $15,000+ | 8% |
Note: These bands are illustrative — actual tiers vary by agreement.
The earned discount is in addition to your base contract discounts, applied after the service-level discount. A shipper with a 45% base discount and an 8% earned discount doesn’t get 53% off — the 8% applies to the already-discounted rate, yielding an effective discount of about 49.4%.
Surcharge Discounts: The Other Half of the Equation
As published base rates get more aggressive discounting, surcharges represent a growing share of total cost — often 30–45% of the total invoice.
Smart negotiators focus on surcharge modifications alongside base rate discounts:
| Surcharge | Published Rate | Negotiated Example | Savings |
|---|---|---|---|
| Residential Delivery | $6.95 | $4.50 | 35% |
| Delivery Area Surcharge | $4.00 | $2.50 | 38% |
| Additional Handling (Weight) | $33.00 | $22.00 | 33% |
| Address Correction | $21.00 | $14.00 | 33% |
Some surcharges — particularly fuel — are rarely discounted and simply passed through as a percentage of the (discounted) base rate.
How to Know If You’re Getting a Good Deal
Without benchmark data, it’s nearly impossible to know whether your negotiated rates are competitive. Here are the key questions to ask:
- How do your discounts compare to shippers of similar size? A 40% Ground discount is excellent for a 100-package/week shipper but below average for a 2,000-package/week operation.
- What’s your effective rate per package? Total spend ÷ total packages gives you a single number to track over time.
- What percentage of cost is surcharges? If surcharges exceed 35% of your total invoice, your base rate discounts may be masking unoptimized accessorial costs.
- When was your contract last reviewed? Agreements should be renegotiated every 12–18 months to keep pace with volume changes and market conditions.
The Bottom Line
Published rates are the starting point, not the destination. If you’re shipping even a moderate volume of packages (50+/week), negotiated rates can reduce your shipping costs by 20–50% or more. But the headline discount percentage only tells part of the story — surcharge modifications, earned discount programs, and minimum charge structures all play a role in your effective rate.
Not sure if your rates are competitive? Upload one invoice to ShipMint’s Instant Analysis tool and get a benchmark comparison in under 60 seconds — free.