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What FedEx and UPS’ Rate Increases Mean for You

Posted by Hannah Kocurek on Nov 8, 2016 10:08:23 AM

Fedex pricing

In light of FedEx and UPS’ recent rate increase announcements, which did not mirror each other as they usually do, an article from Parcel Industry explains what the changes mean for shippers and what to expect going into the new year.

In the article, Rob Martinez, President & CEO of Shipware weighs in:

The changes will make it difficult for most shippers to accurately compare rates and proposals from the two giant shipping companies. Perhaps the biggest impact for shippers is that managing transportation spend becomes more complex and potentially more confusing. Major shippers without access to analytical tools and personnel will be at a significant disadvantage in understanding their transportation spend. It’s no longer as simple as comparing discount % and perhaps minimum charge. In 2017, with differences in transportation rates, dimensional weight factor, residential fees, DAS fees, address corrections, and other surcharges, it will be extremely challenging for a shipper to determine which carrier offers the best deal without major investments in internal analytical capabilities or engaging a third party with this expertise.”

Martinez suggest looking at regional and local alternatives to FedEx and UPS:

“Shippers that want greater flexibility, improved transit times, and lower-cost alternatives to FedEx and UPS are wise to evaluate today’s regional delivery providers.”

Especially for those most likely to see the strongest impact:

“Consumer electronics, pharmaceuticals, and e-commerce are the most likely to suffer higher price increases due to FedEx’ reduction in dim factor from 166 to 139. More generally, any shipper with a high percentage of low-density parcels that does not have a custom dimensional weight factor at or better than 166 is going to be impacted.”

So what’s a shipper to do?  Consider using Dropoff same-day delivery and courier service for your regional and local shipping needs. We promise to give you upfront and transparent pricing, every time, and don’t tack on fees for bulky items. Our feature-rich API makes it easy for you to offer your customers a same-day delivery option directly at checkout on your e-commerce site. With Dropoff, you can rest easy knowing our focus is on providing you with a professional and trusted local courier service.

Contact us today to get started. 

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Topics: Logistics Industry

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