As expected, UPS and FedEx have continued their annual rate increases in 2013, with an average base rate increase of 4.9 percent. This number doesn't sound that bad, until you delve a little deeper and find that the "average" isn't exactly what it sounds like. The majority of packages shipped today are 30 pounds or less. The rate increase for these types of packages is actually up seven to eight percent from 2012.
While these annual increases happen every year and no one is ever really surprised by them, there are a few unexpected changes that may have a detrimental effect on your 2013 shipping budget. These surprise increases are in the surcharges and accessorial fees and are historically high over past years. For example:
UPS will now charge nearly ten percent more than last year's rate for residential delivery surcharges.
UPS's address correction surcharge is 9.1 percent higher than in 2012.
There are many more big price hikes like these in UPS's 2013 rate plan, and FedEx's looks very similar.
If you need to reduce your shipping costs or keep them the same as last year, you must renegotiate with your carrier now. It is one of the best ways to manage your shipping costs and stay within budget. It is also imperative that you are familiar with and understand all of your carrier's rate increases and how they impact your business's individual shipping situation, before you start the negotiations. Depending on your unique shipping profile, even a minor rate increase could lead to a major increase in shipping costs.
Annual carrier rate increases are, unfortunately, inevitable and often unavoidable. But you can offset many of them by being prepared. Know what your carrier's rate increases are and what adjustments you can make to your shipping methods, packaging and strategies to lessen their impact. You may even be able to lower your shipping costs to below 2012 levels if you streamline effectively.
While these annual increases happen every year and no one is ever really surprised by them, there are a few unexpected changes that may have a detrimental effect on your 2013 shipping budget. These surprise increases are in the surcharges and accessorial fees and are historically high over past years. For example:
UPS will now charge nearly ten percent more than last year's rate for residential delivery surcharges.
UPS's address correction surcharge is 9.1 percent higher than in 2012.
There are many more big price hikes like these in UPS's 2013 rate plan, and FedEx's looks very similar.
If you need to reduce your shipping costs or keep them the same as last year, you must renegotiate with your carrier now. It is one of the best ways to manage your shipping costs and stay within budget. It is also imperative that you are familiar with and understand all of your carrier's rate increases and how they impact your business's individual shipping situation, before you start the negotiations. Depending on your unique shipping profile, even a minor rate increase could lead to a major increase in shipping costs.
Annual carrier rate increases are, unfortunately, inevitable and often unavoidable. But you can offset many of them by being prepared. Know what your carrier's rate increases are and what adjustments you can make to your shipping methods, packaging and strategies to lessen their impact. You may even be able to lower your shipping costs to below 2012 levels if you streamline effectively.
About the Author:
Joseph B. Kappernick works with companies to help them reduce their logistics and shipping costs. Please visit NPI to learn more about logistic vendor expense reduction
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