UPS continues to provide essential service amid the ongoing coronavirus outbreak to support the needs of their customers. Their goal is to ensure businesses and customers are able to meet their shipping needs while demand has increased for shipping services.

Please see this document for details:

​Dive Brief:

• UPS' average domestic daily volume was up 8.5% year over year (YoY) in the first quarter, according to the company's Tuesday earnings call. But the shift in volume from commercial to consumer deliveries, brought on by the global pandemic, landed a blow to the carriers' profitability and generated questions from analysts about future price increases. The carrier withdrew its 2020 guidance.
• Stay-at-home orders became commonplace in the first quarter, shifting purchasing online and by late March, roughly 70% of the UPS' volume was residential deliveries. Automated sorting capacity and years of ramping up network speed were not enough to keep these shifts from affecting costs. "We were not able to fully offset the unprecedented and swift changes in market demand and mix," said outgoing CEO David Abney. Revenue per piece was down 1.8% globally YoY in the quarter ending March 31, and operating profit for the domestic package operation was down 45% YoY.
• UPS will continue to review pricing customer by customer as volume mix shifts, executives said. "Prices can be dynamic, just like everything else," Abney said.

​Dive Brief:

• UPS announced peak surcharges on certain domestic shipments in the U.S. beginning Sunday.
• The surcharges will apply to Ground Residential and SurePost packages if a shipper's volume the prior week was more than 25,000 packages greater than the shipper's average daily volume in February. The surcharge is $0.30 per package.
• UPS will also impose a large parcel surcharge of $31.45 per package. UPS will also impose a surcharge of $31.45 per package on large parcels.UPS defines large package as one with length plus girth exceeding 130 inches or with length more than 96 inches.

​With over 13 billion parcels being shipped across the country in a single year, it's all too easy to sign your shipping contract and let your carrier carry on even when there are rate increases. But it's vital to consider how changes in your shipping contract impact your business and to identify what you can do to combat increasing shipping expenditures.

When you review your carrier contracts, you put yourself in a good position for parcel contract negotiation and FedEx and UPS contract pricing optimization. That being said, there are a few things you need to keep in mind when conducting parcel contract negotiation.

Here are a few tips to help you navigate the complexities of carrier contracts:

Review your shipping data

It's impossible to identify where you can save money on your shipping contract without looking back on past shipping history and parcel expenses. However, it can be tricky to review your shipping data alone if you're not entirely sure what to look for. AFMS has the parcel pricing experts you need to review your shipping data and parcel expenses to find where you may be able to save money and strengthen operations.

Avoid the carrier GSR waiver

You never want to sign a GSR waiver when you're negotiating your shipping contract or renewing your contract. Also known as a Money-Back Guarantee waiver, a GSR waiver prevents a shipping client from recovering the costs to ship a package if the carrier delivers the package late. This removes any accountability from the carrier to deliver packages on time.

You never want to sign a contract that keeps your business from capturing refunds or gaining money back when those refunds are justified. Consider having your parcel contract auditing service take a look at the number of times your carrier has delivered packages late from your business to get a better idea of just how much a GSR waiver could hurt your company.

Remember that you're negotiating on your terms

It's crucial to remember when you're going through a parcel contract negotiation that you need to negotiate on your terms, not your carrier's terms. You can negotiate your contract whenever you want, not just when your contract is nearing its expiration date.

Re-negotiating when it works best for you is far more beneficial for your business than waiting until the last minute. It's also important to note that you never want to sign a contract that keeps you from re-negotiating or keeps you from exiting a contract early.

Need help with your parcel contract negotiation? AFMS has you covered. We offer professional parcel contract benchmarking and parcel contract optimization to ensure you're never being overcharged for your shipping. To learn more about parcel contract negotiation  and our other services, contact AFMS today.

• Check reports on parcel companies. It may be easier to pay your shipping bills without looking at the itemization, especially when you're paying third-party. But it's essential to check reports on your parcel companies at least every three to six years to prevent paying for additional fees and fines that could be costing your business thousands of dollars in the long-run.
• Ask shippers for online logins to check bills. It may take some effort and negotiating with your shipper to set up online logins for you to regularly check your bills, but it's an effort worth making. You want to be sure that you're paying only for the services you're actually using. What's more, a shipper who doesn't allow you to access your bills to check them is immediately suspicious and it may not be worth working with them again in the future if they're hiding unnecessary charges.
• Audit shipments daily. It's essential to have your shipments audited daily to make sure your shipments are getting the right discounts. Over $2 billion in refunds and credits go unclaimed by U.S. businesses every year. Unfortunately, it can be tricky to audit your shipments every day when you're also running other parts of your business. That's where an external parcel contract auditing team like AFMS comes in. An external parcel contract auditing team does auditing for a living and can easily spot missing discounts and areas where your shipments are being unnecessarily charged. What's more, with an external parcel contract auditing team keeping an eye on your shipments daily, you can turn your attention elsewhere in your business to keep everything running smoothly.
• Negotiate your contract. It's recommended to have a parcel contract negotiation with your shipper every five to six years. Parcel contract optimization ensures that your business isn't paying more for transportation and shipping services than it ought to be. However, before you go into a contract negotiation it's important to have your contract and your shipments audited by a parcel contract benchmarking team. This way you can deliver your argument with the right evidence to back you up for a better contract.

Looking for parcel shipping contract negotiations support? AFMS has the parcel shipping experts you need. For more information about our auditing, benchmarking, and negotiation services, contact AFMS today

​FedEx is an essential business keeping commerce moving and delivering critical relief during the COVID-19 crisis. We are still delivering for you under state of emergency and shelter in place restrictions issued in various parts of the world.