The news
OnTrac is piloting a program that prices a package below the shipper’s contract rate whenever its network has room to carry it. OnTrac calls it an industry first: dynamic pricing used as a discount rather than a surcharge.
The program, called Dynamic Savings, is being tested by a small group of customers through peak, according to OnTrac’s release. Early access opens in the first quarter, and the full launch is set for January 2027.
OnTrac is launching it just as UPS, FedEx and USPS raise their peak prices for the holidays, with surcharges built to rise when the network is busy. OnTrac’s program works the same way in reverse, so the price falls when the network is slow.
“In those programs, the price only ever goes up,” Vijay Ramachandran, OnTrac’s vice president of marketing, told Supply Chain Dive.
How it works
The program runs inside the shipper’s rate-shopping software, the system that already compares carrier rates on every order, so the shipper never quotes OnTrac by hand.
Rate shop: the software first finds the cheapest contract rate the shipper holds across all of its carriers.
Target: it then sends OnTrac that price as a target, along with the package’s weight, size, origin and destination.
Check: OnTrac looks at how full its network is on that lane that day.
Answer: within milliseconds, it either returns a label at the target price or declines, in which case the shipper ships at the contract rate it found in the first step.
The savings come from trucks and routes that run whether or not they are full. A linehaul truck leaves the sort facility on a schedule, and a driver covers the same ZIP codes every day, so a package added to a route with room costs OnTrac the extra stop and little else.
OnTrac has more of that room this year than last, because it is adding 25% to 30% more capacity in 2026, most of it in the Northeast, CEO Mike Brown told Supply Chain Dive. A discount that only applies where the network has space lets OnTrac fill those new buildings without cutting the price on volume it already carries.
The discount comes with limits, though: it applies only to volume above the shipper’s weekly minimum, the shipper needs an existing OnTrac pickup, and its software needs a new integration before it can send a bid at all.
The backdrop
Parcel carriers have tried dynamic pricing once before, and that time the price only went up and never came back down.
UPS charged its first peak surcharge in 2017, at 27 cents on a residential ground package for two holiday weeks. Then in 2020, UPS and FedEx tied the fee to each shipper’s own volume, so that a shipper sending more than its February average paid more per package, and the more it grew, the more it paid. By 2021, FedEx was charging a shipper running at five times its baseline as much as $6 a package, per Supply Chain Dive.
The fees then outlasted the pandemic. FedEx kept a 60-cent residential charge running past January 2022 with no end date, and UPS followed a year later, renaming its peak fees “demand surcharges” and keeping them on “until further notice,” per FreightWaves.
As far as we could find, no parcel carrier had tried the same idea in the other direction until now.
The pattern
Two other companies have started pricing parcel delivery by capacity this year, although each does it differently from OnTrac.
Veho: launched FlexSave in February, which lets a shipper give up a fixed delivery date in exchange for a wider window and a lower price. It is a standing option rather than a live bid.
Amazon: since August, FBA sellers have been able to bid a per-unit price for a slot in Sub Same Day, its fastest tier. That runs the opposite way, with sellers bidding up for scarce fast capacity, as we reported.
The national carriers, meanwhile, are not moving. UPS and FedEx raised their residential peak surcharges by more than 20% for this season, to 75 and 80 cents a package at the top rate, while USPS is charging a 6% peak increase on top of an 8% fuel increase that has been in place since April.
The counter
Shippers say they want a fixed price, and OnTrac’s own survey, cited in its release, found that 89% of them want price certainty. OnTrac says the contract rate works as a ceiling, so the price can only fall. Even so, the shipper still does not know on any given day what it will actually pay.
OnTrac is also raising some of its own fees at the same time. While it held its residential peak fee flat at $1 a package this year, it raised its large-package fee 4.8% to $110, and its over-maximum fee 8.2% to $595, per TransImpact.
What’s next
The full launch is January 2027, and the weeks in which OnTrac says yes will show what the program really is. Ramachandran said the savings would come “especially in non-peak periods,” so if the bids clear only in the slow months, the program fills a network in February and March while the peak surcharges still set the price when the shipper needs capacity most. The first pilot shipper to publish a per-package number will settle it.
