​UPS has once again reinstated its money-back guarantee after suspending the program at the beginning of the pandemic due to unexpected market changes. As a greater number of Americans began working remotely and staying home to reduce the spread of COVID-19, e-commerce has seen a major surge. Compared to the 13 billion parcels shipped in the U.S. in 2018, there were up to 14.7 billion parcels shipped in 2020. Amazon packages alone made up 1.9 billion of those parcels.

How will this impact businesses?

Because the pandemic is still continuing to impact transportation and delivery speeds, there's greater potential for businesses to file claims against carriers for late parcel shipping services. Even small percentages of late package deliveries could lead to hefty costs for UPS. It's for this reason that, as the pandemic continues, FedEx is still suspending its own money-back guarantee to prevent large charges for missing or late package claims.

However, UPS isn't reinstating the policy without a safety net of its own. UPS's reinstated policy only impacts its air delivery products, and the shipping carrier is extending the time frame in which its air delivery products are considered on time. Compared to the shipping carrier's previous deadline of 3 PM for its next-afternoon deliveries, the new deadline has been extended to 11:59 PM. In this case, businesses will still be able to file claims against UPS for late packages but the carrier has elbow room to make up for transportation and delivery delays due to the pandemic.

For businesses that rely on UPS's air delivery products, it's important to know how the new deadlines will impact the delivery of these products. Because next-afternoon air delivery products are commonly used by business-to-business customers, it's a good idea to plan ahead for an extra day to send documents and other B2B parcels. The new deadline also applies to UPS's next-day air products, which guarantees parcel shipping deliveries by 10:30 AM. The deadline will additionally apply to UPS's early morning air delivery products, which promise parcel shipping deliveries by 8 AM the next morning.

Keep an eye on your parcel shipping contract

With UPS reinstating its money-back guarantee program with a new deadline extension, it's important to make sure that your business isn't being taken advantage of. Approximately $2 billion in parcel shipping refunds and credits go unclaimed by U.S. businesses every year, and late parcel shipping not only affects your company's bottom line but also your brand reputation.

AFMS' parcel contract auditing and parcel contract optimization can help guarantee your business is getting the most out of its shipping contract. To learn more about how parcel shipping optimization and parcel shipping negotiation can benefit your business, contact AFMS today.

It's no secret that your company needs to be strategic when it comes to parcel shipping. After all, the U.S. is the biggest market in terms of parcel spending. Choosing the right carriers is essential to making sure you're not overpaying for parcel shipping costs.

However, your bottom line isn't the only thing you need to worry about when it comes to carriers. You also need to be concerned with brand reputation. Customers who receive late packages or don't receive their packages at all won't be shopping with your business again. That angry customers will be sure to leave a trail of bad reviews so other customers know not to shop with your business, either.

Regional Carriers Can Make Shipping Easier

Adding regional carriers to your shipping strategy is a great way to help make sure your shipments arrive when they should and your customers are happy. If you're not sold just yet, here are some advantages of adding regional carriers to your shipping mix:

1. You can save with lower transportation costs: National carriers are great when you need to ship your parcels to a general area, but you can save on transportation costs by using regional carriers once those parcels arrive. This is because regional carriers typically have greater flexibility in their delivery services and can deliver your parcels faster and more affordably.


2. You can better compete with Amazon: Competing with Amazon is challenging for a lot of businesses, especially when it comes to Amazon's two-day shipping. Using regional carriers as a part of your shipping strategy can help to cut down on shipping times so you can get your parcels to your customers within a competitive time frame. For instance, many national carriers like FedEx and UPS will offer two-day transit windows for parcel shipping by ground. However, regional carriers will offer overnight services.


3. You can save on accessorial fees: Accessorial fees can be extensive when you're using only national carriers for your parcel shipping. For regional carriers, DAS and residential surcharges aren't as high and may actually be nonexistent in some areas. The result is massive cost savings.

Whether you're using national or regional carriers or a mix of both, it's important to make sure you're keeping an eye on your parcel shipping contract. AFMS offers parcel contract auditing, parcel contract optimization, and parcel contract negotiation to ensure you're getting the best bang for your buck. For more information about our services, contact AFMS today.

According to NBC26, FedEx and UPS ship more than 34 million packages every day. All these items attract charges that range from a few bucks to hundreds of dollars. If you have a big shipment coming in through the usual carriers, here are must-know tips you can use to lower the applicable charges.


Top Surcharges Have a Great Impact on the Final Sum

In many cases, surcharges can be reduced if you make a compelling case to the shipping agent. Generally, it’s easier to negotiate on some surcharges rather than others. For example, residential and common fuel charges are unlikely to be scrapped because they are based on the distance of the shipping.


Discounts and Incentives are Better than Value-Added Services

Incentives are greatly helpful and should be used, especially when you want to make claims for incorrect dimensional weight charges. If the shipping agent insists on their value-added services, make it clear that you appreciate the kind offer but are looking for discounts on the full parcel shipping contract.


Service Refunds Make Shipping Less Risky

What really sets a shipping company apart from the competition is the refund policy. If you are going for the top brands, it helps to compare the terms. In many cases, companies that have invested heavily in protecting your shipping and reducing errors will have better refund terms.


Be Bold Enough to Negotiate

Knowing how to negotiate for cheaper or friendlier terms when shipping is a valuable skill that will serve you well. Shipping contracts will determine whether you can claim refunds or discounts for inconveniences such as incorrect dimensional weight charges or delays in package arrival.


With at least 2,760 packages being shipped every second, you want to protect your packages at the cheapest costs possible. Learning some negotiation tips will help you secure the best contracts especially if you are a regular customer or tend to move expensive merchandise.


Contact us today if you are looking to learn more about parcel contract negotiation.

The global parcel shipping industry is experiencing a transformation as e-commerce and online services rush to adapt to changing consumer needs and behavior. In the last decade, the global parcel volume has more than tripled. In 2019, the parcel volume reached 103 billion parcels, up from 87 billion units delivered in 2018.


The Prices Also Shifted

For 2021, most traditional carriers have already announced their General Rate Increase (GRI). FedEx announced a 4.9-5.9% increase for 2021. USP announced a similar rate of approximately 4.9% increase. Additionally, there are extra surcharges placed on some shippers.


With the tumultuous year that 2020 has been, the expanding costs of parcel shipping may continue to challenge companies that are fighting for survival in these tough times. However, you do not have to let your carrier's GRI dictate your budget in its entirety. You can seek parcel shipping contract negotiation support that can help you save more money.


Optimizing Your FedEx and UPS Rates

Firms such as AFMS continually track and analyze the market changes to better serve you in getting your carrier GSR waiver. Parcel contract auditing, negotiation, and optimization can help save your company's bottom line. Here are three tips to help you save more on your parcel shipping costs.


1. Understand Your Data

You may need to sit down and pour over your data to familiarize yourself with the numbers before heading out for the parcel contract negotiation. With a variety of hidden fees and discounting options, staying informed about your shipping profile can help you have the upper hand as you negotiate with the carrier's rep. Understand your weekly package volume, the average cost per package, the average time in transit, and service type mix (LTL, FTL, ground, express, etc.)


2. Craft A Plan of What You Wish to Achieve with the Optimization

You may need to come up with a plan that will help you save money. It would be in your best interest to bring in parcel shipping consultants such as AFMS to help you craft a strategy to achieve your optimization goals. Their carrier reports can help even the negotiation playing field, allowing you to double on your discounts. You can identify 5 or 7 points of optimization that you wish to achieve and understand their impact on your shipping costs. Remember to focus on the bigger picture, the overall impact of the contract rates.


3. Talk to Multiple Shipping Carriers

FedEx and UPS are the two most popular carriers in the US. It is always smart to speak to smaller parcel shipping companies and understand their rates and services. Find out how they can meet your company's needs and those of your customers. You may need to negotiate the best deal as a shipper, and carrier pricing experts such as AFMS can help you achieve it.

With UPS and FedEx announcing a General Rate Increase (GRI) for 2021, it may be time for your business to consider entering into a new parcel contract negotiation to determine the best possible shipping rates. Unfortunately, your parcel shipping contract may not be as cost-effective as it could be: it is estimated that over $2 billion in credits and refunds go unclaimed every year by businesses in the United States.
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The best way to ensure you are receiving the best available shipping rates for parcel contract optimization is to be informed of all the options available to you and your business. Below are some items to bring to the table for negotiation support when you are looking to settle the best possible parcel shipping contract.

Parcel Contract Auditing
Parcel Contact Auditing is a great way to analyze your shipping contract before a parcel contract negotiation. Audits are in-depth reports that have the potential to save you big money on shipping costs. These audits, when performed by experts, can determine whether or not your shipping company is charging the correct rates, your eligibility for a guaranteed service refund (GSR) or GSR waiver, potential billing inconsistencies, and recovery of funds for items lost during shipping. A line-by-line analysis of your shipping contract by an expert is the best way to gather important information before a parcel contract negotiation.

Negotiation Support Through RFI and RFP
It is essential to have as much information as possible during a parcel contract negotiation. This is where a third-party pricing expert may be useful in offering negotiation support. Using a request for general information (RFI) or a request for proposal (RFP), a third party may be able to assist you in developing a strategy for information gathering.

For example, an RFI can be useful because it presents facts and essential information from a shipping carrier such as basic products, services, costs, and approaches to the marketplace. An RFP can also be an important asset to a parcel contract negotiation because it is more specific than an RFI and may rely on the carrier to provide alternative solutions to your company and its shipping needs.

Parcel Contract Benchmarking
Benchmarking studies can also be an important asset when negotiating a parcel shipping contract. A detailed benchmarking study can be undertaken by a third party to determine if any savings opportunities are available to you. Benchmark analyses can also be beneficial in other ways as they can also identify whether or not you are eligible for certain discounts on your shipping rates, and also compare your shipping costs to other similar businesses in the marketplace. A detailed benchmarking study completed by a third party expert is an essential tool to your parcel contract negotiation because it contains valuable, in-depth information that can ensure you receive the best shipping rates when negotiating your parcel shipping contract.

When entering into parcel contract negotiation, it is important to be in possession of as much information as possible. A third-party expert can help you and your business perform analyses such as benchmarking studies and parcel contract auditing that give you a better understanding of your current contract—and how it can be improved.

Additionally, an RFI and an RPF can be useful ways to gather information from the carrier themselves such as how they operate, what they offer, and what they can do for your business. Information is the best tool for a successful parcel contract negotiation, make sure your business is armed with the most informed and detailed material available to ensure you are guaranteed the best shipping rates possible.

In 2018, approximately 13 billion parcels were shipped in the United States. With shipping rates set to increase in 2021, the cost of shipping these millions of parcels is set to go up significantly for you and your business.

The FedEx and UPS General Rate Increase (GRI), may have a significant impact on the shipping industry moving forward. This is why it is important to consider employing a third party pricing expert to determine the best available shipping rates for your business. Below are the best reasons to use a third party with inside pricing knowledge to assess your pricing needs—and find you the most cost-effective solutions.

Benchmarking
A third party pricing expert will be able to find you the best pricing opportunities for your shipping needs. Benchmarking studies can determine any possible savings opportunities, review your current shipping carrier discounts, and ascertain if your current rates are in line with other businesses with similar shipping needs. These benchmarking studies will ultimately benefit your current parcel shipping contract because they can offer informed and detailed information. These analyses also serve as data for negotiation support when you want to compare rates and consult with shipping companies to develop a new parcel shipping contract.


Experience and Expertise
Third party pricing experts must have the necessary expertise to conduct the studies mentioned above. This is why it is essential to choose a company that has experience in consulting, pricing, logistics, and expert knowledge of the shipping industry and markets. An experienced pricing expert will not only offer detailed, fact-based benchmarking studies but also negotiations support to ensure you get the best shipping rates based on in-depth analysis of shipping invoices and data.

Big Savings
The ultimate objective when consulting a third party pricing expert is to save you money. This is not only done through benchmarking, analysis, and negotiation, but through parcel contract auditing. Parcel contract auditing assesses your current costs and determines whether you are overspending, eligible for any discounts or a guaranteed service refund, or if there are any invalid/fraudulent charges on your account (to name a few). These reports are an essential part of the process, and, when coupled with parcel shipping contract benchmarking, can ensure that you get the most optimal contract available.

Shipping costs account for a large part of your business overhead, so it important that you determine whether you are receiving the best possible rates. A third party pricing expert can help with an informed analysis of your current parcel shipping contact, performing detailed benchmarking studies and audits that evaluate your current spending to determine the best possible rate. By offering negotiations support, thorough assessments, experienced and expert advice, and opportunities for potential service refunds, third party pricing experts are the answer to all of your shipping needs—improving your business, and your bottom line.
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Rates in the $320-to-$360 billion truckload market will continue their sharp rise this year because of surging demand in some sectors to replace depleted inventory as well as sharply rising costs for carriers.
Read the original post on Logisticsmgmt.com

By John D. Schulz · February 15, 2021Rates in the $320-to-$360 billion truckload market will continue their sharp rise this year because of surging demand in some sectors to replace depleted inventory as well as sharply rising costs for carriers.
That’s what leading TL executives and analysts are telling LM as they assess the freight market’s largest sector this year. ​

FedEx, announced additional changes to their 2021 lineup of surcharges on January 15th. The changes will apply to larger volume, or “Enterprise” type shippers, and E-commerce on February 15, 2021.

While the latest set of carrier charges should not be an epiphany to anyone within the shipping community, they can pose significant challenges for some customers. Especially, after what shippers had to endure in 2020. Clearly, all carriers have established a pattern. Many deploying a strategy that is designed to assist in “hedging” for the rising costs of an expanding E-Commerce marketplace, stem the tide of continued constraints on network capacity, as well as protect shrinking profit margins. FedEx, UPS, and the USPS have all made a concerted effort to charge more for the same packages. Levying a series of charges and fees that started back in the Spring of 2020 applied to shipments travelling through their ecosystems.

Good news is that AFMS has been working behind the scenes to assess the impact of all these increases to companies like yours. Don’t’ simply accept these charges without understanding their impact and if you can have these charges reduced or even waived. Given the fact that nobody really knows which of these line items may become “permanent” and that many of these fees are negotiable, a wrong decision could have costly long-term effects. 

Federal Express
Any FedEx shipper who averages 30,000 packages per week starting January 4th, 2021 will be expected to pay an additional $.30 per/pkg. that will be applied to both Express and Ground Residential packages beginning February 15th, 2021. FedEx SmartPost and One Rate Services are exempt.

When one considers the previously announced 2021 Express/Ground Residential GRI and adds it to this latest surcharge, shippers could be looking at impacts ranging from 12.51% (Express Delivery Residential Surcharge) to 15.64% (Home Delivery Residential Delivery Charge) when compared to 2020.

While we mentioned the reshuffling of both carrier’s DAS zips (back in December), FedEx has re-arranged their DAS lineup. Making up for lost time by adding and shifting zip codes to gain parity with UPS. While from a pure numbers perspective this may be true, there are “unique” zip codes that add to the dynamics of these changes. Making it increasingly important to understand the differences between these two carriers. (see table below).

United Parcel Service
Although UPS announced late last year, that they would be re-instating Pre-Peak surcharges, many Peak surcharges were set to either expire (most on January 16th, 2021) or go “until further notice”. UPS has effectively given notice and extended several pertaining to certain Ground Residential, SurePost, Additional Handling and Large Packages.

Effectively re-setting the clock…
Peak Surcharge – Applied to UPS® Ground Residential and UPS SurePost® Packages
A Peak Surcharge will apply to certain UPS Ground Residential and UPS SurePost packages, for all U.S. domestic shipments, for qualifying customers who have shipped more than 25,000 packages during any week following February 2020. The Peak Surcharge will apply in the amounts set forth below to the indicated service levels during the specified Peak Period. Service Levels Peak Period: January 17, 2021 until further notice UPS Ground Residential $0.30 per package UPS SurePost $0.30 per package

Peak Surcharge – Applied to Additional Handling and Large Packages
A Peak Surcharge will apply to packages that require Additional Handling and Large Packages, for all U.S. domestic, U.S. import, and U.S. export shipments, for qualifying customers who have shipped more than 1,000 total packages, or more than 10 packages that require Additional Handling or Large Packages, during any week following February 2020. The Peak Surcharges will apply in the amounts set forth below during the specified Peak Period. Other Charges Peak Period: January 17, 2021 until further notice Additional Handling $3.00 per package Large Package $31.45 per package

AFMS will continue to monitor and provide updates to our customers as changes become available.

​Contact AFMS for a detailed analysis of how these changes can affect your organization at 800-246-3521 or visit us at www.afms.com.

An erratic peak season gives way to the proliferation of same-day logistics startups and an emerging new hierarchy among shippers.  

On Monday January 25th, UPS announced that they have entered into an agreement to sell UPS Freight (UPSF) to TFI International (NYSE and TSX: TFII) for $800 million in a deal that’s expected to close during the second quarter of 2021.
In a press release, UPS Chief Executive Officer Carol Tomé commented that “The agreement allows UPS to be even more laser-focused on the core parts of our business that drive the greatest value for our customers.”
Transaction Highlights

• Includes UPS less-than-truckload (LTL) and dedicated truckload businesses
• Expected to close during the second quarter of 2021

UPS (NYSE: UPS), has entered into a definitive agreement to sell UPS Freight (UPSF) to TFI International Inc. (NYSE and TSX: TFII) for $800 million, subject to working capital and other adjustments.
“We’re excited about the future and the opportunities this creates for both UPS and UPS Freight as part of TFI International Inc.,” said UPS Chief Executive Officer Carol Tomé. “The agreement allows UPS to be even more laser-focused on the core parts of our business that drive the greatest value for our customers.” 
The decision to sell UPS Freight was reached following a thorough evaluation of the UPS portfolio, and aligns with the company’s “better not bigger” strategic positioning.
UPS and TFI International will also enter into an agreement for UPS Freight to continue to utilize UPS’ domestic package network to fulfill shipments, for a period of five years.
The transaction, which is subject to customary closing conditions and regulatory approvals, is expected to close during the second quarter of 2021. UPS expects to recognize a non-cash, pre-tax impairment charge of approximately $500 million on its statement of consolidated income for the year ended December 31, 2020.
With an operating history of over 85 years, UPS Freight is one of the largest LTL carriers in the U.S., offering a full range of regional and long-haul solutions and an on-time delivery guarantee for all LTL shipments and is headquartered in Richmond, VA.
AFMS continuously tracks and analyzes these important market changes ensuring our customers understand these changes and how they may be impacted.  Contact AFMS today for no cost evaluation and get a better understanding for your company.