• “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.

1. Shipping refunds. A guaranteed service refund ensures that a problem caused by your carrier is handled by your carrier and not by you, the business owner. For instance, if a package was delivered late or not delivered at all, a guaranteed service refund ensures that your business isn't the one paying for the customer's refund. It's important not to sign a shipping contract that contains a guaranteed service refund waiver, or GSR waiver, because it keeps you from holding your carrier accountable. If your carrier isn't required to deliver packages on time, then there's nothing stopping them from delivering them late. As a result, your business takes the fall for the late shipping and ends up paying out of pocket for a problem you didn't cause.


2. Flate-rate shipping. Major shipping companies offer flat-rate shipping options. USPS has the cheapest flat-rate shipping, making it ideal for entrepreneurs and other small business owners. Order a few flat-rate boxes from different shipping companies to determine which boxes work best for shipping your products. You'll want to calculate the cost of shipping, shipping time, and box size to determine which flat-rate boxes will save you the most money. Don't hesitate to contact shipping providers to ask for more information about different rates based on the distance the package is traveling.


3. Negotiate your shipping rates. The U.S. is the biggest market by parcel expenditure, making up $119 billion of the $317 global expenditure on parcel shipping. AFMS offers professional and experienced parcel contract auditing and benchmarking to determine where your business can save money on shipping costs. From there, we can help to provide parcel contract optimization and negotiations support to help your business get the best possible deal in your shipping contract.

Ready to get started with parcel contract negotiation? We've got you covered. For more information on how AFMS can help your business save money on shipping, contact us today.

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.

What is a request for information?

A request for information is a document meant to gather information about the capabilities and qualifications of carriers. All an RFI does is request information. It doesn't obligate you to any carrier and doesn't obligate a carrier to your business. Businesses use an RFI to figure out which carriers they ought to invite to the RFP stage. This part of the process may include current shipping partners and new candidates to help expand your shipping efforts. It's not uncommon to expand your network and to bring on new, qualifies carriers to help increase your business' reach in the marketplace and build credibility.

What is a request for proposal?

The next step in the procurement process is the request for proposal. The RFP is a formal request for shipping companies to provide detailed business proposals that can meet your company needs. Your RFP needs to be specific and granular, containing all the information that you need.

A good RFP is effective, innovative, and receives complete responses that give your business the ability to compare shipping companies equally. Each RFP is different based on the needs of the business. However, each effective RFP provides the necessary information that suppliers need to achieve accurate and important responses from carriers.

Seek out parcel shipping contract negotiations support

If you're not sure how to successfully create an effective request for proposal or if you're not sure how to navigate your requests for information, a professional team of parcel shipping contract negotiators can help. With over $2 billion in refunds and credits going unclaimed by U.S. businesses every year, it's important to make sure you're getting the most bang for your buck when it comes to choosing a shipping carrier. Contact the parcel pricing experts at AFMS for more information on contract negotiation support.