View Original Article on CNN Business
New York (CNN Business)Soon, you may not need a label or a box when you're trying to return something at FedEx.
The company is working with Happy Returns, an e-commerce return technology company. Customers will be able to return products in person — without a box or label — for an immediate refund or exchange from participating retailers.
At the FedEx hubs, returns are sorted by retailer, prepared for resale and shipped in bulk back to the retailer that sold them originally. Refunds and exchanges will be initiated by the retailer at the time of drop off.

Halloween is right around the corner, but it isn't werewolves and vampires your business needs to be scared of. It's the ghosts of your missing packages and the refunds your business has been forced to make on behalf of those packages.

Not all Ground and Express packages are delivered on-time despite carrier guarantees. In fact, if a package arrives late or goes missing, there may not even be any recourse with the carrier. Instead, you're stuck with a complaint from your customers that could impact your bottom line and a loss of revenue by refunding the client's shipping costs.

But how does this incident end up happening and what keeps your carrier from being held accountable for their lateness? It turns out, it could be your parcel shipping contract.

Due to many Americans staying home during the COVID-19 pandemic to reduce the risk of spreading the virus, the e-commerce industry has seen an uptick in business. According to CNBC, FedEx and UPS have seen their best quarter in decades, and traders are expected to back them.

• “New Normal” includes Freight and Accessorial Increases 4.9%-9.5%
• FedEx Introduces 6% late payment fee
• “Frozen Tiers” to end October 2020
• Learn how to mitigate these new increases, See below

​FedEx announced their 2021 General Rate Increase on Monday evening, September 14th. Overall, FedEx Ground Home Delivery, Express and International rates, will increase an average of 4.9%. Accessorials, fees and surcharges will see an increase of 4.9% -9.5%. While base freight rates mirror last year’s rate increase of 4.9%, Accessorial fees and surcharges will continue to add to the carrier’s bottom line. Although SmartPost and Ground Multi-Weight service increases have yet to be posted, suffice to say they are on their way. 

Given the recent rounds of Peak charges introduced over the past few months, 2021 Rate increases should be of no surprise. Due to the ecommerce explosion, rising costs, capacity and yield management concerns, carriers have went on the “offensive”. If you were fortunate enough to have your revenue tiers temporarily “frozen” due to COVID, FedEx will be thawing them out in mid-October. If all of these changes are not enough to digest, you will also want to make sure you pay your bill on time or else you will receive a 6% late payment fee, courtesy of FedEx. 

Keep in mind that these increases are only “service level” averages, while fees and surcharges will incur entirely different increases. Each company’s impact is uniquely dependent on a variety of factors. Let AFMS help you sort out the changes and how they will affect your business.

To get down to the details of this increase AFMS has prepared an expert analysis that you can find here.

Many companies too preoccupied with the key factors of their business to pay close attention to their shipping. This is especially true of small businesses, which rely on a smaller workforce and may not have the time or resources to sit down and go through their parcel shipping contracts line by line.

However, if you're not paying attention to your shipping at all, then you may find yourself losing more money than you think. That said, how can your business save money on shipping costs over time without sweating the details? Here are three ways you can save some serious money.

When it comes to parcel contract auditing and parcel contract optimization, there are a few key terms you ought to know: RFI and RFP. RFI and RFP stand for refund for information (RFI) and request for proposal (RFP). Both differ from request for quotation (RFQ).

RFI and RFP each serve different purposes throughout the procurement process, but both are used to obtain important information. The more you know about these RFx documents, the more you can do as a business to improve your position when it comes to shipping and your shipping contract. Both RFI and RFP are instrumental in cost savings, risk mitigation, and process standardization.

The U.S. Postal Service has been hit hard by the COVID-19 pandemic, suffering a $4.5 billion net loss in its most recently reported quarter. After decades of operating without taxpayer subsidy, the public service received no rescue funding since the beginning of the COVID-19 crisis. To stay afloat, the USPS has been prohibiting overtime and cutting transportation costs.

Many small businesses and entrepreneurs rely on the USPS to make shipments. This is especially true of international entrepreneurs who may otherwise have to pay substantial shipping costs that are more expensive than the item being shipped. An end to the USPS could not only mean a significant loss to small businesses but also a shift toward larger carriers like FedEx.

August 7, 2020 Update
This is the most aggressive Peak Season pricing strategy we have seen UPS take.  It is geared towards E-Commerce / Residential Shippers and the goal seems to be to 2-fold:

1. Control the influx / flow of weekly package volume into the UPS network between Nov 15th 2020 - Jan 16th, 2021.   

UPS is using Price to try and drive shippers' behavior to help them better control and manage Peak Season weekly package volume flow in their network.  The 3 tier surcharge matrix in section F seems to be designed to control the rate of volume a shipper plans to tender to UPS each week during the peak Period and / or for shippers to spread package volume to other Parcel Carriers: USPS, FedEx, Ontrac, Lasership each week during the peak period.

2. UPS is going to make more $$$ in Peak 2020.  

UPS and their new CEO, Carol Tome, know shippers are in a very tough situation due to COVID-19 and have to use Parcel Carriers to drive sales and get products to customers.  She has said publicly that UPS needs to get smaller and charge more for their services.

https://www.bloomberg.com/opinion/articles/2020-07-30/ups-new-ceo-carol-tome-has-impressive-earnings-debut  


AFMS helps companies mitigate these carrier announcements.  Please feel free to contact us today and let us review the impact on your company.