DHL Express is the latest company to announce it is raising rates effective Jan. 1. On that date, the general average shipment price increase for U.S. account holders will jump 5.9%, the international shipping provider announced Sept. 27.

“Prices are adjusted on an annual basis by DHL Express,” the company said in a news release, “taking into consideration inflation and currency dynamics such as administrative costs related to regulatory and security measures."

“These measures are updated by national and international authorities on a regular basis in each of the more than 220 countries and territories that DHL Express serves.” The company added, “Depending on local conditions, price adjustments will vary from country to country and will apply to all customers where contracts allow.”

Meanwhile, Memphis, Tenn.-based FedEx Corp. said Sept. 16 its customers will see shipping rate increases and surcharges effective Jan. 6. The hikes will be in the Express, Ground and Freight divisions. However, FedEx said that for the third year in a row it will not apply additional residential surcharges during the holiday season, except for shipments that are oversize, unauthorized or that require additional handling.

FedEx Express and FedEx Ground shipping rates will increase by an average of 4.9%, while FedEx Freight will rise by an average of 5.9%. UPS has not announced its 2020 rates.

​FedEx announced their General Rate Increase on Monday evening, September 16th, a month and a half earlier than last year’s announcement on November 5th, but in line with the announcement timeline 2 years ago. FedEx announced that the Ground and Home Delivery rates, as well as the Express and International rates, will increase an average of 4.9%, as it did last year. New this year the Fuel Surcharge will now be applied to Additional Handling, Signature Options, and COD shipments.

It is important to realize that these announced rate increases are only averages and the impact to your company could vary greatly. ​To determine the real impact of this rate increase to your specific business and shipments contact AFMS for a detailed rate impact analysis at 800-246-3521

UPS just announced 2019 peak season surcharge application, dropping additional holiday levies on residential deliveries while expanding certain surcharge hikes to include the entirety of Q4.

UPS applied a surcharge of between $.28 and $.99 per package on residential shipments during the 2018 holiday season.  FedEx did not join UPS in applying an additional surcharge for residential shipments last year, and have not announced an update for 2019.

UPS will apply peak season surcharges to packages currently subject to Add’l Handling, Large Package, and Over-Maximum surcharges. Additionally, peak season surcharges relating to Large Package and Over-Maximum shipments will be applied over the entirety of Q4 2019, through January 4th, 2020.

Packages subject to Add’l Handling will be assessed a peak season surcharge between November 24th and January 4th; Excluding the YoY concession on residential peak season surcharge, all UPS applications are experiencing tremendous increases in comparison to 2018. Add’l Handling will increase by 14% YoY, to an addition of $3.60 per package.  Large Package classifications will result in an additional $31.45 surcharge, representing an increase of 20%.

​Lastly, Over-Maximum classifications will result in an additional $250 surcharge, an increase of 50% when compared with 2018.

This shift largely targets packages that are either unattractive from a UPS cost basis or shouldn’t be in the network (Over-Maximum), while increasing YoY pricing competitiveness for residential shipments. As UPS continues to experience robust growth in e-commerce volumes and associated delivery/stop density improvements, residential shipments are decreasingly onerous from a cost basis. This factor plus expansion of surcharges in the aforementioned areas will likely keep overall revenues intact while providing significant benefit to B2C shippers.

Contact AFMS, learn how our team can help you reduce these new charges and help lower your parcel shipping costs. 800-246-3521

By Paul Ziobro
Updated July 23, 2019 7:18 pm ET

Read the Full Article Here in the Wall Street Journal: https://www.wsj.com/articles/ups-to-start-7-day-delivery-to-juggle-demands-of-online-shopping-11563918759

For over 25 years AFMS has helped companies review these constant changes and pricing complexities of these carriers and the effects these changes have to your bottom line. Check out the full published profile here - Parcel Magazine

​By Mike Erickson, CEO - AFMS Global Transportation Consultants

Several years ago, there were three full service carriers offering ground, air, hundredweight, and international services.  FedEx and UPS are currently the last two carriers still servicing the entire U.S. with time definite deliveries. Both offer the same type of services and compete for the same clients.  Five years ago, there were over 50 accessorial charges with the two major carriers. Now, there are over 200!  The carrier’s new data capture technology has allowed them to more effectively charge accessorial charges that they physically couldn’t in the past...

How do you find what the market price is for your company? Before a shipper even starts to sit down and negotiate with potential carriers, a company needs to thoroughly analyze its shipping volumes and data as well as take a close look at its own shipping needs. You should benchmark your rates against the market to see where you stand. Contact a company like AFMS, to benchmark and evaluate your agreements.
​
Click here to read the full article

AFMS continues to monitor the UPS strike to provide feedback and help to our clients in mitigating any impact changes in the industry may cause. If you need any other information regarding potential impacts from these issues or you would simply like us to review your current carrier pricing and performance, please feel free to contact us at (800) 246-3521.

Tentative Labor Deal. Late Thurs. night, the Teamsters announced an agreement in principle on a new 5-year labor contract with UPS  The deal includes slightly lower wage inflation for full-time employees and reduced costs for weekend deliveries, offset by higher pay for part-time workers. Overall, the deal seems like a good agreement for everyone. 

Lower Annual Wage Inflation. The contract includes a combined wage increase of $4.15/hour over the life of the contract. This implies 2.1% annual wage increases, down from 2.3% and 2.7% annual increases in the prior 2 contracts (see Exhibit 1). The deal also includes “significant” increases in benefits for employees, although the exact amount wasn’t quantified yet. 

But Higher Part-Time Pay. Starting pay for part-time employees (about 50% of total Teamster members) will increase materially from $10 currently to $13 going forward. This is double the increase in part-time pay compared with the last contract and should more than offset the benefit from slightly lower wage inflation for full-time employees. 

2-Tier Hybrid Driver is Positive. The deal will create a 2-tier hybrid driver that should materially reduce the cost of weekend deliveries for UPS. Currently, UPS pays its drivers overtime for Saturday deliveries which the company started last year. Going forward, this new class of employees will act as package handlers during the week and drivers over the weekend, and make a blended rate between the 2 pay scales. This will eliminate overtime pay for weekend deliveries and should allow UPS to start Sunday deliveries. 

Share Shifts from the Rails. The contract requires UPS to shift some volumes off of the rails and back onto UPS trucks. As a result, UPS will create at least 2K new high-paying sleeper jobs for line-haul transportation. 

Is it Enough? While the reduced cost of weekend deliveries is definitely an incremental positive, we don’t believe this contract provides UPS a material improvement in labor savings and flexibility that we believe is necessary to offset continued mix headwinds from rapid B2C growth.

​It is important to realize that these announced rate increases are only averages and the impact to your company
could vary greatly. To determine the real impact of this rate increase to your specific business and shipments
contact AFMS for a detailed rate impact analysis at 800-246-3521.

Published in Parcel Magazine July-August 2017 Issue
​By Brittany Beecroft

Freight charges can represent up to 10% of a company's total costs. Fuel surcharges and fees drive that cost even higher, and we trust that what our contract says is what our invoice hears. In the world of transportation cost management, auditing invoices can become a clerical routine that gets pushed to the “to-do” pile. But Freight Audit and Pay (FBAP) is a key part of a company’s supply chain and should be seen as intelligence, not inconvenience. Some companies opt to manage FBAP internally — others outsource freight payment. Is one way better than the next? How do we outsource a process so inherently internal?
Click here to read the full article