In e-commerce, profitability hinges on a brand’s ability to control costs and manage margins. There are many levers a brand can pull to lower expenses. Product costs, fulfillment operations, marketing efficiency, customer service overhead, and return rates all influence the bottom line. However, shipping costs alone typically eat up 10-15%1 of a brand’s total revenue, with parcel spend being one of the largest cost drivers for DTC brands.
Parcel costs are driven by a mix of variables: zone, weight, dimensions, speed, fuel surcharges, and accessorial fees. Each carrier calculates these factors differently. UPS and FedEx apply dimensional (DIM) weight pricing to most shipments2, meaning bulkier packages are often priced well above their actual weight. USPS still uses weight-based pricing for many services, though recent changes in pricing structures and service tiers have made their pricing more similar to competitors.3 Hybrid carriers like UPS Mail Innovations (UPSMI) use negotiated rates based on factors like volume commitments, regional injection points, and where the package is handed off in the delivery network.4
Accounting for these diverse pricing models to determine the best way to offer fast and affordable shipping to end consumers is a significant challenge for brands. And the recent large-scale changes U.S. carriers have been implementing have only made the math for parcel margins much harder. Rising rates and shifting policies from USPS, UPS, UPSMI, and even Canada Post are making it increasingly difficult and costly for brands to meet consumer expectations.
What Changed in 2025 for U.S. Parcels
UPS began by introducing a 5.9% General Rate Increase (GRI) on December 23, 2024.5 Shortly after, on January 2025, UPS and USPS ended their SurePost partnership.6 This eliminated a commonly used hybrid last-mile option that helped brands keep costs stable for lightweight shipments. Many online retailers were forced to shift volume to UPS Ground or to regional carriers, often at a higher per-parcel cost due to dimensional weight fees and fewer last-mile efficiencies.
UPS Mail Innovations (UPSMI) also introduced new pricing pressure, with rates increasing by double digits effective May 11. New charges include a $1.75 extended-area fee and a 1.5% penalty for late payments.7
Even after a sharp rate hike in mid-2024 averaging 25% for Parcel Select, USPS followed that increase with another one in early 2025, with Parcel Select rising another 5.4%.8 The next round is planned for July 13, with Parcel Select rates going up by another 7.6%.9 Uncertainty has grown as well with the recent announcement of a new Postmaster General10, raising concerns about possible privatization or additional service changes.11
Cross-border shipping has not fared much better. In May 2025, the Canadian Union of Postal Workers (CUPW) issued a strike notice. Although a full walkout was avoided, the union imposed a ban on overtime beginning May 2312. U.S. brands that rely on Canada Post for cross-border inventory movement and last-mile delivery now face a heightened risk of delays.
As carriers continue to adjust their operations and pricing structures, e-commerce brands are finding it increasingly difficult to maintain predictable and cost-effective delivery services. Together, these changes are limiting flexibility and driving up the cost of getting products to end consumers on time.
Carrier Strategies To Stay Agile Against Rising Parcel Costs
As carriers raise rates and restructure services, e-commerce brands are being forced to rethink delivery options while hopefully protecting margins. And while a shipping blueprint is highly customized per brand, there are strategies brands can employ to soften the impact and build agility into their fulfillment.
Diversifying Carriers
Relying on a single carrier leaves brands exposed to rate hikes, service disruptions, and limited negotiation power. Diversifying across multiple carriers enables brands to compare costs, maintain delivery speed, and preserve flexibility as conditions change.
This approach allows brands the flexibility to match each shipment to the most cost-effective and reliable service based on weight, zone, and delivery time. For example, a brand might use Carrier A for lightweight subscription boxes, Carrier B for same-day delivery in urban hubs, and Carrier C for long-distance standard shipping—all based on zone, weight, and SLA requirements.
Tracking Carrier Performance
Tracking and benchmarking key performance indicators, such as cost per package, cost per zone, on-time delivery rate, and exception frequency, helps brands identify underperforming services and shift volume where it makes financial and operational sense.
For instance, if a brand is consistently seeing a higher exception rate (i.e., delays or lost packages) from a specific carrier in Zones 7-8, it may make sense to test alternatives for those destinations. Say, after tracking KPIs, a brand discovers that deliveries to the West Coast via Carrier A are late 18% of the time, while Carrier B has a 96% on-time delivery rate to the same regions. With this insight, the brand shifts West Coast volume to Carrier B, resulting in a significant reduction in delivery delays and a great boost in consumer satisfaction.
Leveraging Regional Carriers
Regional carriers can offer faster delivery and lower rates within their service zones, often bypassing national carrier congestion. These carriers also tend to offer fewer surcharges and more favorable dimensional weight rules, making them especially cost-effective for small to mid-sized parcels.
In markets where regional carriers are viable, e-commerce brands can cut per-parcel costs by 10-40% compared to national carriers.13 Shorter delivery distances also mean fewer handoffs and better visibility, reducing the chance of service exceptions and missed deliveries.
While these strategies can significantly reduce parcel costs and improve SLAs, putting them into practice introduces a new layer of operational complexity. Integrating multiple carriers across your multichannel e-commerce platform, order management system (OMS), warehouse management system (WMS), and transportation management system (TMS) requires precise coordination. Routing logic, carrier selection, rate shopping, SLA tracking, and performance reporting must all function in sync, executing in real time while maintaining consistent service levels across your entire fulfillment network. For many brands, building this integrated, scalable system is a major challenge.
Thus, more retailers are turning to fulfillment partners that natively support a multi-carrier approach and can adapt to market volatility without the added overhead. With the right partner, brands can unlock the benefits of broader carrier access, faster routing, and lower costs through combined bargaining power, without the burden of managing dozens of carrier relationships on their own.
Flexible, Scalable Carrier Integration
Stord’s carrier-agnostic last-mile delivery solution, Stord Parcel, integrates with national, regional, and last-mile carriers across all service levels. This carrier diversity, combined with advanced technology-driven routing decisions, allows brands to avoid disruption while keeping transit times and costs under control. Stord allows brands to track performance in real time and adjust routing to ensure packages reach their destinations quickly, even as market conditions shift.
Stord is built to absorb shocks that would otherwise disrupt a brand’s fulfillment operation. While many retailers faced unplanned costs from carrier price hikes or delays tied to the Canadian postal strike, brands using Stord Parcel were shielded from both. In fact, 98% of shipments moved without issue through these disruptions. Meanwhile, UPSMI customers saw no rate increases, giving them continued access to a lower-cost delivery option without new surcharges.
One Stord brand partner put it plainly: “Switching to Stord meant that year-over-year, we saw zero increase in parcel costs while everyone else saw theirs go up.”
Part of this resilience comes from our proactive carrier expansion. Our parcel network has grown from all national partners to adding many new regional players in the past couple of months, with more slated to join this year. This broadens regional reach and reduces reliance on legacy carriers that may impose mid-year changes or capacity limits.
Stord’s recent acquisition of Ware2Go from UPS adds further depth to its fulfillment capabilities. With Ware2Go’s national warehouse network and delivery infrastructure, Stord can better serve distributed inventory models and increase speed-to-customer. The acquisition also strengthens the parcel network’s ability to shift volume fluidly across nodes and carriers, supporting faster and more cost-effective fulfillment nationwide.
Brands that trusted Stord to manage and select the ideal parcel per package saw an average reduction of 1 day in transit time. Now in 2025, brands are seeing on average an additional 1 day improvement. This 2 day reduction in transit times means massive savings, faster deliveries, and even a reduction in CO2 emissions.
For brands aiming to stabilize parcel delivery, reduce exposure to rate volatility, and improve delivery performance, a multi-carrier model is only as effective as its execution. Stord’s integrated network, backed by real-time performance data and a growing set of carrier partnerships, delivers on that execution—without requiring brands to manage the complexity on their own.
Control Parcel Costs, Protect Your Margins
Parcel represents one of the most volatile cost centers in e-commerce. Brands without a flexible strategy are already seeing the impact with tighter margins, slower deliveries, and growing pressure from consumers.
Though no one can predict every market shift, brands that partner with a fulfillment provider that can help build scalability into their shipping strategy will be better positioned to absorb cost spikes, meet and exceed delivery promises, and continue earning customer trust despite ongoing uncertainty.
