Here is what EasyPost recommends in this situation:
This is an error returned by UPS when there is an issue with your UPS account, usually some sort of hold. The most common reason we see this is that someone entered the wrong password too many times on your UPS account. This will lock you out for 24 hours. Obviously that is a long time to wait to see if that might be the issue, so we recommend getting in touch with UPS directly.
If you want to talk to someone on the phone, the direct line for UPS.com technical support is 800-247-9035. This is just Tier 1 support, but in our experience, 20% of the time they can help. They tend to pick up the phone quickly - using this number there is no phone tree to follow.
Tell them very clearly "I am making an XML API request and receiving back error 120121. The error message is 'The Shippers shipper number cannot be used for the shipment'. Can you verify that my account is in good standing for use with the XML Shipping API?" They will verify that your account is in good standing, has all bills paid up, etc. If that is the issue, they can solve it.
Most of the time they can't solve it because it was some automated security process put the hold on the account. What they will do is refer you to a web form to reach out to the actual API support team.
That form is here.
To fill out this form, select "Technical Support" > "Developer Resources" on the first page.
On the second page make sure you select "Shipping" as the developer resource (select the Shipping option under the XML header within the dropdown). When you enter your ticket send text similar to the following:
"My UPS Account number is ######. My UPS.com username is 'xxxxxxxx.' I am making an XML API request and receiving back error 120121. The error message is 'The Shippers shipper number cannot be used for the shipment.' I understand this means there is an issue with my account. Can you help me clear up any holds or other issues with the account that are preventing me from shipping with the XML API?"
It should take them 1-4 business hours, eastern time, to reply to you. They will have further instructions on what needs to be done at that point to clear the hold.