As you may know, shipping via UPS at U-M is done under a contract administered by the state of Michigan. While U-M is not required to use this contract, our past analyses have shown it to be the most cost-effective option. UPS, however, is streamlining its contracting approach and didn’t renew its direct contract with the state, making consortium agreements one of U-M’s few remaining options for securing competitive pricing.
In late February, the state of Michigan joined an existing consortium contract with UPS, which significantly increased shipping costs for some U-M units. Under the previous contract, any negotiated discounts were not increased for the duration of the agreement. The new contract—under the NASPO ValuePoint cooperative purchasing program, with which the state participates—allows U-M and other public entities to pool purchasing power to secure several benefits such as better contract terms, enhanced customer service, and improved warranty coverage on a variety of goods and services.
The NASPO contract does, however, include higher UPS shipping rates based on market conditions and other factors, such as the elimination of some discounts. The impact to your unit depends on shipping volume, package, and service types, among other factors.
As FY 2026 approaches, we want to ensure that you’re aware of the potential impact the NASPO contract may have on your shipping costs so you can budget accordingly for the new fiscal year. We can’t, unfortunately, provide any detailed information on increases at this time, because shipping costs vary based on factors such as weight, destination, service type, and other variables.
Procurement Services is committed to supporting the U-M community during this transition and is analyzing how the new contract will impact each unit’s budget. While we’re working to understand the immediate effects, we’re also exploring alternative shipping options to ensure the NASPO agreement remains the most cost-effective shipping choice for the university community. If you have questions about—or require assistance with—your UPS account, we encourage you to reach out to U-M’s UPS contacts. For other questions or additional assistance, please contact Procurement Services.