In an attempt to raise profits, UPS and FedEx have been steadily increasing rates in 2013. So far, the average increase is 4.9 percent, but don't get too excited by this relatively low, but misleading number. 4.9 percent is the average increase for all of the new rates, but the most common ones are much higher. Packages weighing 30 pounds or less will cost seven to eight percent more this year and make up the majority of packages sent.
While these annual increases happen every year and no one is ever really surprised by them, there are a few unexpected changes that may have a detrimental effect on your 2013 shipping budget. These surprise increases are in the surcharges and accessorial fees and are historically high over past years. For example:
UPS's residential delivery surcharge is an almost ten percent increase over 2012's price.
UPS will now charge 9.1 percent more than last year's rate for address correction surcharges.
These two instances are only a glimpse of a long list of increases, and FedEX's prices are very similar.
This means that now is the time to renegotiate with your current carrier if you want any hope of reducing your shipping costs or keeping them the same as in 2012. Failing to do so will guarantee that the 2013 rate increases have a much bigger impact on your shipping costs and budget. Before negotiations are started, you must gain insight into how the new rates will affect your shipping operations. Even the smallest rate increase could have damaging effects to your business, depending on your unique shipping situation.
One thing's for sure, UPS and FedEx are probably not going to lower their rates any time soon. But if you are ready for them and understand how to manage them, you have a good chance of minimizing their impact. Stay on top of all carrier changes and be ready to make whatever changes you can to soften the blow. Even minor adjustments in shipping methods and strategies can lead to big savings if you are effective.
While these annual increases happen every year and no one is ever really surprised by them, there are a few unexpected changes that may have a detrimental effect on your 2013 shipping budget. These surprise increases are in the surcharges and accessorial fees and are historically high over past years. For example:
UPS's residential delivery surcharge is an almost ten percent increase over 2012's price.
UPS will now charge 9.1 percent more than last year's rate for address correction surcharges.
These two instances are only a glimpse of a long list of increases, and FedEX's prices are very similar.
This means that now is the time to renegotiate with your current carrier if you want any hope of reducing your shipping costs or keeping them the same as in 2012. Failing to do so will guarantee that the 2013 rate increases have a much bigger impact on your shipping costs and budget. Before negotiations are started, you must gain insight into how the new rates will affect your shipping operations. Even the smallest rate increase could have damaging effects to your business, depending on your unique shipping situation.
One thing's for sure, UPS and FedEx are probably not going to lower their rates any time soon. But if you are ready for them and understand how to manage them, you have a good chance of minimizing their impact. Stay on top of all carrier changes and be ready to make whatever changes you can to soften the blow. Even minor adjustments in shipping methods and strategies can lead to big savings if you are effective.
About the Author:
Joseph B. Kappernick works with companies to help them reduce their logistics and shipping costs. Please visit NPI to learn more about logistic vendor cost reduction
No comments :
Post a Comment