• The 2018 FedEx and UPS Rate Increases: A Closer Look

    11/20/2017 — Leah Hyland

    FedEx and UPS Rate Increases for 2018

    With the New Year approaching, it’s time to look at the UPS and FedEx rate increases for 2018 and how they will affect your costs. In September, FedEx announced an average increase of 4.9% on Express and Ground services. UPS joined the party in October, announcing that they will also be increasing their rates by an average of 4.9%. The new 2018 UPS rates will take effect on December 24, 2017, while FedEx will be instating them a week later on January 1, 2018.

    The averages might be the same, but the rates vary. With higher increases for some services and lower increases for others, you can’t budget based on your costs increasing 4.9%. It’s important to look at what services you use, your package characteristics, and the locations you’re shipping to, and then evaluate the new rate charts to find your biggest cost offenders from the 2018 FedEx and UPS rate increases.

    On top of the FedEx and UPS rate increases for 2018, there are additional updates that are likely to affect your shipping costs. First, UPS is lowering its dimensional (DIM) weight divisor from 166 to 139 for domestic packages less than or equal to one cubic foot (1,728 inches) in size. With this change, UPS and FedEx are back in line with each other on how they calculate dimensional weight. Both carriers will now use 139 for all domestic and international packages.

    It’s been a wild ride the past few years with multiple changes to which packages DIM weight pricing applies to and how it’s calculated, so this is a welcome stabilization. However, a lower divisor means a higher chance that your package will get billed at your DIM weight, rather than your actual weight. If you ship packages one cubic foot or under with UPS, it’s important to take note and make changes to eliminate any unused space in your packaging or consolidate orders when possible.

    Surcharges are also increasing, with some at alarming rates. Most notably, in 2018 FedEx and UPS are coming after larger, oversized packages. Not only are they increasing at a higher rate than most surcharges, they are by far the most costly. For example, the FedEx Unauthorized Packages fee is increasing from $115 to $300 and the UPS Over Maximum Limits charge is increasing from $150 to $500. The shipping trends that have resulted from the rise of e-commerce has taken its toll on the carriers and they’re having to move more and more oversized packages that can’t go through their automated systems. Time is money, so they’re tacking on hefty fees to make up for it.

    Ahead of the new FedEx and UPS rate increases for 2018, new holiday peak season charges will also apply. UPS is adding peak surcharges on domestic residential packages during the busiest shipping days of the year – from November 19 to December 2 and from December 17 to December 23. These fees will add up quick when you have an increased amount of orders over the holidays. 

    In a notable departure from UPS, FedEx decided not to add a peak season surcharge this season. Instead they opted to increase surcharges for packages that are big or bulky enough to require special handling. UPS is also increasing the cost of larger packages by adding additional peak season surcharges on top of the already existing surcharges. The 2018 UPS rate announcement included increases for these surcharges for the next holiday season, so you can expect this trend to continue.

    The 2018 FedEx and UPS rate increases are proof that the carriers are getting smarter, hitting shippers where it hurts most. Luckily, you don’t have to navigate the changes alone. The shipping experts at PartnerShip have evaluated the new rate charts and we have completed a detailed analysis, so it’s easier for you to assess the impact on your shipping costs. Download our free white paper today!

    Download the free white paper: A Closer Look at the 2018 FedEx and UPS Rate Increases

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  • Holiday Shipping Schedule 2017

    11/16/2017 — Leah Hyland

    Thanksgiving is coming up, and Christmas and New Years are just around the corner! It's a busy time of year, so we've put together a shipping schedule that you can use to plan around carrier closures. 

    check out the 2017 holiday shipping schedule

    Days of operations for PartnerShip are listed as well. As always, we're here to help you ship smarter during the holidays. If you need help, give us a call at 800-599-2902 or email sales@PartnerShip.com. 

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  • FedEx Announces General Rate Increases for 2018

    10/05/2017 — Leah Hyland

    FedEx Announces Rate Increases for 2018

    You may have heard that FedEx announced its General Rate Increases (GRI) for 2018. In the past few years, UPS has been the first of the two major small package carriers to make an announcement for the coming year, but this time FedEx is taking the lead.

    Here are the announced average increases that will take effect January 1, 2018:

    • 4.9% for FedEx Express domestic and international services
    • 3.5% for FedEx One Rate
    • 4.9% for FedEx Ground and FedEx Home Delivery
    • 4.9% for FedEx Freight

    As it’s important to remember every year, these averages don’t paint a complete picture. The zones you typically ship to and the services you typically use could dramatically affect the actual increase you’ll see on your invoices. Some are much higher than the average, while others are much lower or remain the same. UPS is likely to make its announcement for 2018 rates soon and if history is any indication, the averages will be similar to its competitor. 

    FedEx and UPS traditionally have similar average rate increases, but in the last few years their base rates have diverged a bit. Ground base rates used to be nearly identical, but in 2017 the two carriers took different increases in different zones, making it harder to compare apples-to-apples. On top of that, they also implemented slightly different approaches to dimensional (DIM) weight pricing, by using different DIM factors. As a result, looking at what would be most cost effective for you and how your rates will change has become more complicated.

    Another trend that we’ve seen from UPS and FedEx is the announcements of additional changes throughout the year, separate from the GRIs. The announced averages have gone down in recent years, but these mid-year adjustments can sometimes have a larger impact.

    One example of this is the new peak season surcharges that UPS is implementing for the holidays this year. UPS recently announced that it will apply a 27-cent charge on all ground residential packages during its busiest weeks in November and December. FedEx is taking a notably different approach and forgoing any additional holiday residential surcharges except for  packages that are big or bulky enough to require special handling.

    Both UPS and FedEx attribute charges like this to the rise of e-commerce, which has brought a sharp increase in residential shipments, particularly oversized items like furniture and exercise equipment. These kind of parcel shipments put a strain on their networks and their sorting machinery, and they've been finding ways to make up for these costs.

    FedEx is also making a couple of additional moves to address the changing nature of parcel shipments in 2018. It will now apply a surcharge for shipments with third-party billing – mimicking a move that UPS made at the beginning of 2016. FedEx will also begin applying a DIM factor of 139 to all SmartPost parcels, effective January 22. UPS already applies DIM weight pricing to SurePost packages, but uses a higher DIM factor for packages 1,728 cubic inches and under.

    Every year, when the new rates for UPS and FedEx are out, PartnerShip does a complete analysis so you can determine what effect it will have on your business. Subscribe to the PartnerShip Connection blog to be alerted when it’s out so you can start planning for the new year and learn how to mitigate the rising costs of small package shipping. 

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  • LTL Rate Increases You Need to Know About

    07/13/2017 — Leah Hyland

    LTL rate increases 2017Freight carriers are catching shippers off guard this year by taking their general rate increases (GRIs) earlier than before. Last year, the LTL rate increases came in the fall, but this year many of the major carriers increased their rates in May and June.

    • ABF increased an average of 4.9% on May 22
    • Estes increased an average of 4.9% on June 26

    Planning and budgeting for your freight
    When you look at average LTL rate increases, it’s important to note that you can’t take the average at face value. If you’re trying to determine what kind of effect this increase will have on your freight costs, you will need to look at the specific increases in your typical lanes. Some lanes will have drastically lower or higher increases than the average.

    Factors affecting price
    There are several factors that contribute to the cost of your freight, and there are several trends that have had an impact recently. In recent years freight carriers have made a push to become more efficient in measuring and classifying freight. Many LTL carriers have invested in dimensioning machines, which makes measuring dimensional weight a lot easier. This means shippers need to be extra careful when choosing a freight class on the BOL to avoid costly reclassifications.

    Another factor is capacity. The manufacturing industry is expanding steadily, creating more demand, while the trucking industry is experiencing a driver shortage. The new ELD mandate and hour of services changes will only continue the trend. When capacity is tight, the power is in the hands of the carriers and they can charge more – especially on less profitable lanes.

    If you’ve been watching the news the last several months, you probably saw the recent wave of retail chains closing many of their brick-and-mortar stores. Ecommerce has had a profound effect on the market and the trucking industry is not immune. Consumers have come to expect free shipping and are buying more and more individual items online. As a result, there are more residential deliveries than ever before and in some cases there has been a some shift in demand from truckload to LTL.

    Offsetting the increases
    PartnerShip works to negotiate competitive rates on your behalf with the most reputable LTL carriers in the industry. Combat these rising costs by contacting our shipping experts at 800-599-2902 or email sales@PartnerShip.com.

    Get a free quote on your next LTL freight shipment!

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  • Carrier Liability vs. Freight Insurance. What’s the Difference?

    06/02/2017 — Jerry Spelic

    Freight damage and loss is a reality of shipping. It’s not a matter of if it will happen to you; it’s a matter of when. When damage or loss occurs, your first thought is, “How will I be compensated?” To answer the question, you need to understand the difference between carrier liability and freight insurance.