{"id":37067,"date":"2026-02-12T15:11:18","date_gmt":"2026-02-12T15:11:18","guid":{"rendered":"https:\/\/www.argonandco.com\/?post_type=article&p=37067"},"modified":"2026-02-12T16:01:55","modified_gmt":"2026-02-12T16:01:55","slug":"2026-parcel-outlook-why-cost-increases-are-no-longer-about-base-rates","status":"publish","type":"article","link":"https:\/\/www.argonandco.com\/us\/news-insights\/articles\/2026-parcel-outlook-why-cost-increases-are-no-longer-about-base-rates\/","title":{"rendered":"2026 Parcel Outlook: Why cost increases are no longer about base rates"},"content":{"rendered":"
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Guest author: Jim Haller, Director, Consulting Channel, AFS Logistics
jhaller@afs.net<\/p><\/div>\n

The predictability once associated with parcel pricing driven primarily by annual General Rate Increases (GRIs) is a thing of the past. Sure, GRIs are still a thing \u2014 both UPS and FedEx implemented a 5.9% GRI for 2026 \u2014 but shippers are discovering that headline rate increases tell only a fraction of the story.<\/span><\/p>\n

The latest TD Cowen\/AFS Freight Index backs this up. Its data shows that higher accessorial charges, rating logic changes and network design decisions by carriers are driving parcel cost inflation far more than base transportation rate increases.<\/span><\/p>\n

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As shippers head deeper into 2026, making sense of these structural cost drivers, and how carriers are using them, will be critical to maintaining budget control and service performance.<\/span><\/p>\n

The 2026 GRI: familiar number, very different impact<\/strong><\/span><\/p>\n

Given that their topline GRIs for 2026 were identical to their average increases in each of the last two years, on paper it doesn\u2019t appear carriers are doing anything extraordinary to guard margins despite prolonged soft demand. But when you look just below the surface, it\u2019s obvious that the carriers are relying heavily on subtle-yet-potent actions, including not only surcharge increases, but also rating adjustments, to make their numbers.<\/span><\/p>\n

Take fuel surcharges for example. Despite only modest increases in diesel prices, carrier fuel surcharges increased materially on a year-over-year basis. For ground parcel, a 4.7% rise in diesel prices translated into a 26% increase in carrier fuel surcharges.<\/span><\/p>\n

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So, if, as a shipper, you\u2019re feeling like cost increases are disconnected from market fundamentals, it\u2019s because they often are.<\/span><\/p>\n

Accessorials are now the primary cost lever<\/strong><\/span><\/p>\n

The Freight Index shows that accessorial charges are now the dominant driver of parcel cost per package (CPP), especially for ground shipments.<\/span><\/p>\n

In Q4 2025:<\/span><\/p>\n