UPS and FedEx Shipping Cost Criteria Has Changed Significantly
An excerpt from Safety Smart Gear’s Monthly Newsletter, because it bears worth repeating . . .
You may have heard the criteria with which shipping charges are calculated through FedEx and UPS have changed effective December 29th 2014 for UPS and January 5th 2015 for FedEx. On September 16, 2014, FedEx announced its general rate increase (GRI) for 2015 and UPS made its announcement the following October. On the surface, the two announcements are identical—citing a 4.9% annual rate increase for 2015. The new FedEx rates apply to FedEx Ground, FedEx Express, FedEx Freight, and import and U.S. export services. The new UPS rates apply to UPS Ground, Air, International, UPS Air Freight, and UPS Freight.
What this means for you:
If you ship product, you will notice that both carries are applying dimensional weight pricing (DIM) on all ground packages. Lightweight and residential parcel shippers will be impacted the most. Be mindful 4.9% is just an average. Shippers would benefit to perform a detailed analysis of their pricing agreements, package characteristics, and services to gain a better understanding of how the new rates will impact their transportation costs.
Customers who have product shipped to them should be aware of these changes as well. They could have a significant impact on shipping costs.
Because of the new UPS and FedEx shipping rates, companies (even if they’ve made absolutely no changes on their end) are forced to pass this increase on to their customers.