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.”
“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.”
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