Shipware | An SIB Company

How will UPS & FedEx surcharges compare in 2025 after the approaching increases? Don't forget: the announced 5.9% average increase does not apply to surcharges, which are subject to much higher increases and which can account for as much as 40% of a shipper's parcel spend.

On December 23, UPS will increase rates by an average of 5.9% and common surcharges between 5% to 28%. Here's... 📦 What you need to know about how much each service is increasing 📦 How UPS's increases compare to FedEx' 📦 And what actions you, as a shipper, can take in response to your costs increasing. https://lnkd.in/g4y7rGJj

FedEx shippers, are you prepared for your carrier's annual rate and surcharge increases? Here's what you need to know: https://lnkd.in/gMDY4NVQ We cover... 📦 What service rate increases are above and below the 5.9% average 📦 The significant increase in cost to ship large packages 📦 Higher increases to 2-day services in response to market demands 📦 Year-over-year Minimum Charge increases 📦 Year-over-year Surcharge increases 📦 How shippers should respond to these increases... ...and more. #logistics

"The Amazon Effect" has given some way to "The Covid Hangover." Gordon Glazer, modal optimization specialist, spoke with Cailley LaPara at Bloomberg on why more and more consumers and sellers alike are opting out of expedited deliveries. https://lnkd.in/gRR5y8vP

Surcharges used to account for roughly 25% of shipper's parcel spending. Today, that number is closer to 35-40%. Here's why that's important. 📦 Surcharges are increased and adjusted more frequently than base rates. Base rates typically are subject to one annual increase, the General Rate Increase. Surcharges, on the other hand, can be increased multiple times throughout the year, and adjustments are often more discreet and more challenging to track. Fuel surcharge tables, for example, are increased regularly throughout the year, and certain FSCs can have a significant impact on shipper's spends. A 1% (100 bps) increase to domestic fuel surcharge tables can be roughly equivalent to a 1% average General Rate Increase. These adjustments add up. 📦 Surcharges can be complex, and adjustments can be hard to track. With a larger share of your parcel spend coming from surcharges, a larger share of the source of your spend is now more obscured. Take Delivery Area Surcharges, for example. The surcharge rate may not change, but your carrier can (and has) add hundreds of new zip codes accounting for millions of people to the DAS tables or move zip codes from DAS to Extended-DAS at their discretion, which will increase your costs. Going back to fuel, FSCs are generated from a percentage of base rates and other surcharges applied to a shipment based on fee tables that vary from service to service and based on a weekly variable, the cost of fuel. Because they appear on an invoice as a single line item, they naturally obscure the associated costs. In addition, your carrier can (and has) adjust the services and surcharges to which the fuel surcharge is applied at their discretion without prior notice. On August 19th of this year, UPS added surcharges like Address Correction and Dangerous Goods (Hazardous Materials) to their list of FSC-applicable surcharges, seemingly out of nowhere, and was something that a lot of shippers missed. 📦 Many shippers have, for lack of a better word, terrible surcharge discounts. It's not uncommon for shippers, when negotiating with their carrier, to tunnel vision on base rates. As a result, we've seen shippers with millions in spend with little to no discounts on important surcharges like Delivery Area, Additional Handling, and even Residential. The shift to a larger share of spend being attributed to surcharges is going to impact these shippers more. If you're not sure whether or not your surcharge discounts are cut out for the current pricing environment, you should consider assessing your discounts with a third party. ---- In this article from Max Garland, Paul Yaussy and Adi Karamcheti discuss how UPS and FedEx are continuing to offer shippers great rate discounts but, in turn, targeting surcharges to increase revenue per piece https://lnkd.in/gC4JizxW

❓Question for you, #parcel shippers. Do you think using one carrier for all of your shipments gets you better pricing? If you've stumbled across our posts before, you may know that we're huge fans of carrier diversity for many types of shipping profiles - both for cost and service benefits. So you might think that we'd say "no," carriers do *not* thank you for not using their competitors with great pricing. But, in truth, it's more complex than that. Storytime! A $3.5m/year DTC shipper used UPS exclusively *for over 20 years* - nearly all ground residential. Their carrier reps consistently reassured them they had the best rates possible. They treated their carrier well with two decades of customer loyalty, so their carrier reciprocated with awesome rates... right? A brand new Director of Operations with no preconceived notions of their customer/carrier relationship came on board and said, "Yeah, I don't know about that. Let's get a second opinion." (Probably not an actual quote, but you get the idea.) Here's what our free analysis of the shipper's "best-in-class" rates uncovered (and keep in mind this shipper shipped ground resi almost exclusively): 📦 High Ground minimums 📦 Subpar discounts on Ground services 📦 A poor Residential Surcharge discount 📦 Absolutely zero Fuel, Delivery Area Surcharge, or Additional Handling discounts Our analytics and consulting teams rated the shipper's pricing a 2.5 out of 4. They were overspending by roughly 30%. In addition, the bulk of their shipments were Zone 8, and cost-prohibitive express rates meant long ground times in transit. Customers were abandoning carts due to long shipping times; sales were being lost. Energized by the results of our analysis, the shipper pursued an aggressive multi-carrier RFP resulting in an *evergreen* FedEx contract that's saving them over $1m per year while improving their transit times through affordable express rates. They're saving money, increasing sales, and making customers happier. The cherry on top: they even saved an additional 8% through subsequent optimizations. So, back to the original question: does single sourcing with UPS or FedEx get you better pricing? The answer is that consistently analyzing your shipping data, understanding up-to-date marketplace pricing, and regularly negotiating is what achieves the best pricing. Sometimes, depending on your shipping profile and business needs, the best results will come from diversifying your carrier mix, and sometimes it means using a single carrier. Find out which is best for you. And, whether you currently single-source UPS or FedEx or have a large carrier mix, it's always a good idea to validate your pricing with a source other than your carrier rep.

UPS has announced a 5.9% average General Rate Increase to Ground, Air, and International services, effective December 23, 2024. As expected, UPS's 2025 GRI matches that of FedEx's 5.9% increase announced a few weeks ago, but takes effect a full two weeks earlier. In addition, effective January 27, 2025, UPS has announced that the Large Package and Additional Handling Surcharges will be subject to new definitions incorporating cubic volume. More details to come. Furthermore, effective October 21, 2024, UPS's area surcharge zip codes and some zip code alignments will change. With the exception of UPS Ground with Freight Pricing packages, Additional Handling length, width, and length + girth shipments will be subject to a 40 lbs. minimum billable weight. Lastly, effective October 26, 2024, invoices paid via credit card will be assessed a 2% surcharge. Keep an eye on our page for our future analysis of UPS's general rate increase and its actual impact on shippers. Read UPS's announcement here: https://lnkd.in/dYsuE7VF #UPS #logistics #logisticsmanagement

Shippers, as we wait for UPS to follow FedEx in announcing their annual rate increase, take 20 minutes to review these 5 Carrier Negotiation Tips before your next pricing discussion: https://lnkd.in/gHpPH3pS Throw it on in the background while sending emails or prepping that next KPI report. These tips can save you *tons* on parcel shipping. Let us know your favorite tip in the comments! #logistics #ecommerce #supplychain

*wistfully* They grow up so fast these days... UPS's Surge Fees, the less-than-two-weeks-old surcharge, is already getting its second announced increase. Effective October 13, 2024, Worldwide Express parcel services from the US to the rest of the world will be charged an additional fee of $0.10 per lb. Worldwide Express Freight shipments will see a $0.14 per lb. fee. UPS Standard to Mexico will also incur a $0.10 per lb. fee, and UPS Standard to Canada will cost an additional $0.14 per package, not per pound. Latin America origins will also be added to the Surge Fees table. Packages to the US with LATAM origins will be assessed a $0.05 per lb. fee. #logistics #ecommerce #logisticsmanagement

✌️ Two updates, Shippers. OnTrac has just announced its Peak Season Surcharge, and UPS has increased its Surge Fees. OnTrac's holiday season Demand Surcharge will be in effect from October 26, 2024 - January 18, 2025. All residential packages will incur an extra fee of $0.75. This year, the transcontinental carrier has opted for a simplified surcharge by not applying baseline periods or volume thresholds. In addition, from September 29, 2024, to January 18, 2025, Additional Handling shipments will incur a supplemental $7.75 demand surcharge and Large Package/Oversize shipments, $84.50. Details from Ontrac: https://lnkd.in/gayNhrFq In other parcel pricing news, UPS has *already* increased and broadened the reach of its new Surge Fee, first implemented *checks watch* just five days ago on September 15. Effective September 22, the surge fee for shipments to the US from a number of territories will more than double. e.g., China to the US is increasing from $0.50 per lb. to $1.09 per lb., and Taiwan to the US is increasing from $0.25 per lb. to $0.64 per lb. The surge fee will also expand to include the Rest of Asia and Europe. Unspecified territories will incur a $0.23 per lb. surge fee. In addition, shipments from India to the US will now incur a $0.68 per lb. surge fee. Canada has also made the list. UPS Standard shipments from Canada to the US will incur a $0.18 per package (note: not per pound like the others) fee. Details from UPS: https://lnkd.in/guDfHgp4 #logistics #supplychain #logisticsmanagement