A year-end carrier contract review comes down to five jobs: pull 12 months of shipment data, list every surcharge you paid, check your minimum commitments and tier thresholds, re-rate a sample of real shipments on other carriers, and decide whether to renew as is or renegotiate. Done in that order, each step feeds the next, and you finish with numbers instead of impressions. Start in early fall, because new list rates may take effect in the first days of January and a negotiation takes time.

Why does the review need to happen before January?

The review needs to happen before January because a contract discount may be a percentage off list rates, in which case your net rates rise when list rates rise unless the contract says otherwise. A discount that looked fine this year may be applied to a higher base next year.

The first 2027 announcement is already out. According to Parcel Industry's September 2026 analysis, FedEx announced an average 5.9% increase for U.S. domestic and international package services, effective January 4, 2027, the fourth consecutive year at that headline figure. The same analysis points out that the average hides the detail that matters to a specific shipper: by its calculation Ground rises a uniform 6.1% across zones, 1 to 5 lb Ground packages take the steepest increase at 6.49%, the Ground minimum charge rises to $12.70, Additional Handling goes up 7.1% to 7.6%, and Extended Delivery Area Surcharges go up 8% to 9%. These are that publication's figures, so confirm each one on the FedEx rate page before you use it in a calculation.

As of this writing UPS has not published a 2027 general rate increase, so UPS shippers should run the review on current rates and re-run the affected steps once a figure is announced. Our FedEx and UPS 2027 rate increase page tracks what has been announced.

What data should you pull first?

Pull 12 months of shipment-level data first, because every later step is a calculation on that file. A shorter window misses seasonal swings.

For each shipment you want, at minimum:

Ship date, carrier, and service level
Origin and destination ZIP codes, plus the zone if the invoice shows it
Actual weight, billed weight, and carton dimensions
Residential or commercial flag
Base transportation charge, each accessorial as a separate column, and the net total
Your own reference: order number, customer, or cost center

The usual sources are carrier invoice data downloads, your shipping software's export, and your ERP's shipment records. Carrier invoice data is the most reliable for charges because it reflects what was actually billed, including adjustments applied after the label was printed. If the references on the invoice do not match your order numbers, fix that convention now; it is the same field you need for the cost allocation described on our parcel spend management page.

Summarize the file three ways before going further: spend by service, shipment count by weight band and zone, and spend by charge type.

Which surcharges did you actually pay?

List the surcharges you actually paid by totaling each accessorial column for the year, then ranking them by dollars. The charge types at the top of that ranking are the ones worth negotiating.

Charge type	What to record	Why it matters in the review
Fuel	Total dollars and share of base charges	May be the largest line after transportation
Residential	Count and total	Shows how much of your "B2B" volume delivers to homes
Delivery area / extended area	Count and total by ZIP	Concentrated in specific customers
Additional handling and oversize	Count, total, and which cartons	May be fixable with packaging before it is negotiable
Address correction	Count and total	A data quality cost, not a rate cost
Dimensional weight	Shipments where billed weight exceeds actual	Tells you whether the divisor is worth asking about
Peak or demand	Total and the weeks it applied	Check how your contract treats it
Minimum charge	Count of shipments billed at the minimum	A discount does nothing for these shipments

Two rows deserve extra attention. Shipments billed at the minimum charge ignore your percentage discount entirely, so if light packages are a large share of your volume, the minimum is a bigger lever than the headline discount. And where a surcharge is rising faster than base rates, as Parcel Industry reports for FedEx Additional Handling and Extended Delivery Area in 2027, a contract with no concession on that surcharge gets more expensive than the average suggests.

Are you on track for your minimums and tier thresholds?

You are on track if your trailing spend, measured the way the contract measures it, sits comfortably above your commitment and inside the tier you were priced for. Checking requires reading the agreement, not the rate sheet.

Look for these terms:

Tier definition. Tiered discounts may be based on a rolling average of weekly or annual net spend. Find the exact measure and window.
Your position. Compute that measure from your data. Note how far you are from the tier below and the tier above.
Minimum commitment. Check whether there is a revenue or volume floor and what happens if you miss it.
Term and notice. Record the end date, whether it auto-renews, and how much notice a change requires.
Rate increase language. Check whether the contract caps the annual increase or passes the full general rate increase through.
Early termination. Note any clause that claws back discounts if you move volume away.

This step sets the limits for the next one. If you are close to dropping a tier, moving even a modest share of volume to another carrier can cost more than it saves. If you have plenty of headroom, you have room to test alternatives.

How do you re-rate a sample on other carriers?

You re-rate a sample by taking a representative set of last year's shipments and pricing each one again, with the same weight, dimensions, and destination, at the rates you could get elsewhere. Then compare all-in totals, not base rates.

Build the sample so it mirrors your real mix: a few hundred shipments spread across your weight bands, zones, and residential share, drawn from more than one month. Price each shipment on your current contract with the announced 2027 changes applied where they are known, then on each alternative: another carrier's proposal, USPS for the light packages, or a shipping platform's rates.

Here is a worked example. Every number in it is hypothetical and exists only to show the arithmetic.

Example: A distributor samples 400 shipments. On its current contract those shipments cost $6,000 all-in. Repricing them with next year's increases gives $6,380. A competing carrier's proposal prices the same 400 at $6,150. A platform's rates price them at $6,290 overall, but for the 120 shipments under 5 lb the platform total is $1,010 against $1,180 on the contract. The result is not "switch" or "stay". It is that the contract wins on the heavier cartons, the light packages are the weak spot, and the distributor now has a specific ask for its rep: better pricing or a lower minimum on light Ground packages.

A negotiated contract may beat platform rates on the lanes and weights it was built around, and may lose on the edges.

Should you renew or renegotiate?

Renew if the re-rate shows your contract within a small margin of the alternatives after the new rates apply, and renegotiate if it shows a specific, measurable gap. Either way, you now have the evidence to back the choice.

A simple decision rule:

Renew as is when the contract wins across the sample and you are safely inside your tier.
Renegotiate specific terms when the gap is concentrated: a surcharge, a weight band, the minimum charge, or the rate increase cap. Bring the shipment counts and dollars for that one item.
Split volume when another option clearly wins on a segment and your tier position can absorb the move.
Go to bid when the gap is broad and the term is ending anyway.

Our guide on how to negotiate UPS and FedEx rates covers the conversation itself.

Where GoatLabels fits

GoatLabels is useful in this review as a comparison point and as a home for volume your contract does not price well. As multi-carrier shipping software, one account rate-shops USPS, UPS, FedEx, and DHL on every parcel and shows one all-in number per carrier. The Free plan is $0 a month for up to 50 shipments, and Pro is a flat $40 a month with unlimited shipments and cheaper label rates; details are on the pricing page. Every label debits a prepaid wallet and writes a dated ledger line carrying your reference, which gives you clean data for next year's review.

The limits are real. GoatLabels does not support bring-your-own carrier accounts or negotiated rates, so you cannot run your own contract through it, and it does not offer volume contracts, LTL or freight, or a dedicated account manager. If your negotiated contract beats the platform rates on your sample, keep shipping that volume on your contract. The reasonable use is the segment where the re-rate says the platform is cheaper, loaded by CSV or API as described on our ERP shipping integration page.