Supply Chain Consultancy outlines two major U.S. Parcel Carrier’s 2019 Annual Rate and Surcharge increases and the impact on shippers
Spend Management Experts (SME), a supply chain spend management consultancy, has released a detailed 2019 Carrier Rate Increase Guide outlining key comparisons between two of the major U.S. parcel carriers, FedEx and UPS. In the rising e-commerce market, there is an ever-increasing demand for shippers to have packages of all sizes delivered quickly and a need for carriers to invest in technology and infrastructure to meet that increase in volume. UPS notes that rate increases support “ongoing expansion, capability enhancements and high service levels.”
In addition to the annual trend of a 4.9 percent increase, both carriers have increased several surcharges this year which will have a significant impact on shippers of all sizes. To mitigate the impact of these increases, it is important for shippers to identify opportunities to optimize their supply chain networks. FedEx will publish their full rate guide December 17th and those changes will go into effect January 7th while UPS will publish their rate guide and implement their increases December 26th leaving shippers with little to no time to adjust their supply chain.
Outlined in the 2019 Carrier Increase Guide, you will find the following comparisons and what it means for shippers:
• Residential Delivery surcharges and alternate options for shippers
• Oversize and Large Package surcharges and how shippers can mitigate this fee
• Additional Handling fees from UPS will increase $2.25 for packages less than 70 pounds and $4.00 for packages over 70 pounds. FedEx will also increase their fees to $13.50 – a 12.5 percent increase from 2018
• Lastly, FedEx will increase their Address Correction fees by 6.67 percent – a 23 percent increase since 2016
According to SME Founder and CEO John Haber, “While the annual rate increases are in-line with our expectations, the significant surcharge increases will negatively impact shippers of all sizes. It is critical for every shipper to understand how these increases will impact their costs in 2019 and work pro-actively to try and minimize these cost increases.”
