UPS and FedEx recently announced their 2017 rate increase. These annual  increases usually average around 5%, creating a significant impact on companies shipping costs.  Now it's the time to begin the work, so that these increases can be minimized.  AFMS will do a NO CHARGE ANALYSIS of your current shipping profile, along with how these rate increases will effect you.  ​

In Parcel Magazine's September-October 2016 Issue, Brittany Beecroft of AFMS tells us how:
"Small parcel shippers understand the nature ofthe General Rate Increase, and they attempt to mitigate the increase accordingly. We can negotiate a solid contract, but if our understanding and visibility of data suffers, so can our expected savings. Is there a one-size-fits-all approach to negotiation? No. Are there bases every shiper should cover? Absolutely."
Click here to read the full article.

In Parcel Magazine's September-October 2016 Issue, Brittany Beecroft of AFMS tells us how:
"The trend of shifting from the procurement department to transportation managers in order to blend inbound and outbound into your contract can inherently create savings." Click here to read the full article

Additional Handling Surcharge. A surcharge applies to any FedEx Ground® package that measures greater than 48 inches but equal to or less than 108 inches along its longest side. Prior to June 1, 2016, a surcharge applies to any FedEx Ground package that measures greater than 60 inches but equal to or less than 108 inches along its longest side. All other Additional Handling Surcharge size, weight and packaging parameters remain unchanged. The surcharge remains at $10.50 per package. This change applies to shipments within the U.S. and from the U.S. to Canada. See the Jan. 4, 2016, FedEx Service Guide for details.            

​http://www.fedex.com/us/2016rates/other-changes.html

UPS GRI: Similar, but Different from FedEx on 2016 Rates
The Difference is in the Details
Dan Malech, AFMS
Fewer and fewer price differences between the two carriers; UPS & FedEx prices will now be nearly identical for many services
UPS announced their 2016 UPS rates and for the first time, with the exception of Three Day Select and 2DA Letter, Air services match FedEx Express services penny for penny in the continental US.  Therefore, UPS will be discontinuing their Standard Rates that they had created to match the FedEx Express Rates.  UPS will once again only have Daily rates, with only Three Day Select and 2DA Letters varying from FedEx.  The UPS and FedEx continental Ground rates are also identical.
Accessorial Charges
Just like last year, nearly all of the accessorial charges will be identical for the two carriers. Fuel is the one exception, with UPS fuel surcharges tending to be 1.25 to 1.75 percentage points higher.  For November, UPS will have a 23.5% higher ground fuel surcharge than FedEx and an astounding 63.6% higher air fuel surcharge.
Third Party Shipments
For the first time ever, UPS will apply a 2.5% service charge on all Third Party shipments. This could have quite an impact depending on the bill type mix in your portfolio.
Domestic Express
To reiterate, the 2016 domestic express base rates will now be identical for the two carriers. In the past, FedEx Express has priced their base rates somewhat higher than UPS. However for 2016, The Next Day AM, Next Day PM, 2nd Day AM PKG, and 2nd Day PM PKG rates are identical. Over the last few years, UPS has made an effort to lower the gap between it and FedEx on the express front, and that effort is now all but finished.  In order to get to the point of matching FedEx UPS had to have a higher rate increase to achieve this.  See below for average increases by service.  Furthermore, UPS has done away with their Standard Rate charts that had filled that price gap. The one exception is 3 day air, where FedEx rates are an average of 19.8% higher than UPS, and with some weights and zones over 60% higher.    
International Shipments
UPS international increases are somewhat higher than the domestic increases, with some weights and zones up just shy of 9%. The rates up to 25 Lbs take a relative low increase of about 3.5%, but over 25 lbs are closer to 7%.
Here are the average UPS increases by service:

• Ground Commercial 5.8% 1-5 lbs zones 2-8 (4.75% 1-70 lbs.)
• Ground Residential 5.5% 1-5 lbs zones 2-8 (4.73% 1-70 lbs.)
• Next Day Air AM: 5.9%
• Next Day Air Saver PM: 6.4%
• 2 Day AM Air: 8.5%
• 2 Day Air: 8.0%
• 3 Day Select: 6.8%
• Ground Hundredweight: 4.7%
• Air Hundredweight: 5.7%-7.4%
• Ground Standard to Canada: 5.8% 1-5 lbs (3.4% overall)
• International Express OB Lanes:
  •  China: 6.3%
  • UK, NL, FR, DE: 5.9%
  • HK, TW, JP, SG: 6.4%
  • KR, TH: 6.5%
• International Saver OB 5.0%
• International Expedited OB 5.6%

For a complete cell by cell analysis of the UPS & FedEx 2016 increases, contact AFMS at 800-246-3521

FEDEX EXPRESS, FEDEX GROUND AND FEDEX FREIGHT, SUBSIDIARIES OF FEDEX CORP., WILL INCREASE SHIPPING RATES EFFECTIVE JANUARY 4, 2016.
FedEx Express will increase shipping rates by an average of 4.9% for U.S. domestic, U.S. export and U.S. import services.
FedEx Ground and FedEx Home Delivery will increase shipping rates by an average of 4.9%. FedEx SmartPost rates will also change. FedEx is also increasing surcharges for shipments that exceed the published maximum dimensions (“unauthorized packages”) in the FedEx Ground network and updating certain fuel surcharge tables at FedEx Express and FedEx Ground effective November 2, 2015. (Click here to read more)

By Dan Malech, AFMS Pricing Director and Doug Caldwell, AFMS VP International

• 6.4% increase in 1-5 lb. ground rates
  
• Some international rates increase nearly 9%
  
• 4.9% increase is on top of dimensional factor changes

For the first time in recent history, FedEx has announced their service rate increase; both express AND ground, before UPS. 
The FedEx rate change will be effective Monday, January 5TH, 2015. FedEx has announced that their ground and express rates will take a general rate increase of 4.9%.