E-commerce businesses are thriving right now. In fact, up to 2,760 packages are shipped every second. However, despite a thriving market, shipping costs are still one of the highest expenses when it comes to order fulfillment. With the surcharge increases recently implemented by FedEx and UPS are here to stay, it comes as no surprise that many businesses are questioning their shipping carrier strategies.

Compared to traditional retail companies, e-commerce businesses typically employ small parcel providers. But it's important to consider your options as your business grows to determine whether using multiple carriers or using a single carrier is in your best interest.

Know what your business needs

Multiple carriers aren't for everyone, and the volume of your shipments isn't always enough to consider making the switch away from a single-carrier arrangement. A regional carrier may be all your business needs if it's the most efficient strategy for your shipments and if your company's service level is your top priority. Regional carriers are typically best for when your shipments are concentrated in a single geographic location. Their rates and other fees may also be more competitive compared to national carriers.

However, it may be worth considering national carriers if your business begins to see the following:

• A dramatic increase in orders


• A surge in business in other geographic locations


• Increasing problems with your regional carrier

Keep in mind that parcel contract auditing and parcel contract optimization are both essential to the success of your shipments whether you're using regional or national carriers or both. If your business doesn't meet your customers' expectations when it comes to delivery, then it'll be your brand reputation that takes the hit, not your carrier.

Have professionals conduct a parcel audit

When your business is comparing rates and determining whether using multiple or single carriers is best, it can be helpful to understand how your shipping rates are determined with your current carrier. Professional parcel pricing experts can conduct an audit on your current parcel contract and shipping history to determine if you've been paying for late deliveries, returns, or overcharges.

From there, you can get a more accurate idea of what your business would be paying your carrier after parcel contract optimization is conducted. This gives you the ability to compare shipping carriers, rates, and methods more accurately when choosing whether to use multiple carriers or switching to a new regional carrier.
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If your business needs assistance with parcel contract optimization, parcel shipping contract benchmarking, or contract auditing, AFMS has you covered. For more information on our services, contact AFMS today.

Every year, businesses ship billions of parcels across the country and worldwide to deliver their products to happy customers. In 2018 alone, approximately 13 billion parcels were shipped. To ensure that customers stay happy and get their parcels on time, businesses rely on carriers and shipping contracts to transport their products. However, because carriers also need to make money, it's not uncommon for shipping parcel contracts to try and take advantage.

To help you avoid wasting money on services that you don't need to pay for, here are some of the most common signs that your parcel contract is actually hindering rather than helping your business and what you can do to stop it.

You've signed a GSR waiver

You never want to sign GSR waivers when you're signing a parcel contract. If you've signed GSR waivers in the past with your current carrier, there's a chance you've been paying for product returns that aren't your responsibility. GSR waivers waive the right to late delivery refunds. That means your carrier isn't responsible for getting your customers' packages to them on time.

This is a problem for several reasons. First, your business is the one paying for a refund if your customer's package gets lost in the shipping process even if the loss is the fault of your carrier. Second, your customer isn't likely to do business with you again, will possibly leave a bad review harming your brand reputation, and is likely to tell their friends and family members about their terrible experience.

You have discounts in areas you don't use

You might think that your parcel contract is doing wonders for your business because it offers you great discounts. But if those discounts are for areas that your business doesn't use, then you're not getting the savings you think you are. Even worse, if you've signed a GSR waiver in exchange for these discounts, you could be throwing money in the garbage. It's essential to know what service levels, package characteristics, and zones you use. This way, you'll know which areas will have the biggest impact on your parcel budget when you sign a new contract.

You're struggling with shipping costs

Parcel contract negotiations are crucial because your business should never be struggling with shipping costs. While it's true that parcel carriers typically have their profits in mind more than your savings, the shipping prices ought to be within your pricing wheelhouse. If they're not, your business needs to advocate for itself. Parcel contract negotiation services can help with that.

Looking for parcel contract auditing and negotiation services? AFMS understands how overwhelming it can be to determine whether you're getting the right bang for your buck when it comes to shipping. Our parcel pricing experts will help to make sure that you're not being overcharged for shipping services. We'll also provide parcel contract negotiation services to ensure that you're getting the services you need for the price that works best for you. To learn more about our parcel contract negotiation services, contact AFMS today.

This past May, U.S. parcel shippers were hit with major price hikes from FedEx and UPS when the delivery services implemented domestic surcharges at short notice. UPS increased their surcharges on May 31 with FedEx close behind, increasing surcharges on June 8 to keep up with the competition. With the COVID-19 pandemic increasing the number of e-commerce shipments made, it wouldn't come as a surprise to see these surcharges jump up again soon.

Oversize fees, delivery area surcharges, and accessorial charges are always prepared to increase. That being said, it's important to make sure your business isn't being taken advantage of during parcel contract negotiations. To help you avoid losing money, here are three items your business needs to negotiate with FedEx and UPS throughout the rest of this year.

GSR Waivers

When you're getting ready to renew your parcel shipping contract, you mustn't sign a GSR waiver. A GSR waiver is a Guaranteed Service Refund that prevents a shipping client from recovering the costs to ship a package if the carrier delivers a package late.

GSR waivers, such as the FedEx Money Back Guarantee and UPS refunds, are typically added to parcel contracts in exchange for additional discounts and extra incentives. However, despite these discounts and incentives, it's important not to sign a FedEx Money Back Guarantee or UPS refund guarantees. This is because, if you check your parcel audit, GSR waivers such as the FedEx Money Back Guarantee can end up costing you 3% to 5% in lost revenue because carriers won't be held accountable for late deliveries.

Weight Surcharges

The U.S. is the biggest market by parcel expenditure, making about one-third of all money spent on parcel shipping. Weight surcharges have increased for both FedEx and UPS. Weight charges apply at 50 pounds (actual weight) instead of the current 70 pounds. That's a significant cost for shippers at $24 per instance. It's in your best interest to request a discount with your carrier to find a way to offset this increase in expenses.

If you can't get a discount for these new weight surcharges, consider exploring your network with an RFI, or Request for Information. An RFI can help you determine which carriers to invite to a Request for Proposal (RFP) if they meet your requirements through the RFP process. Switching carriers can help your business expand its network and build credibility in the marketplace.

Rate Caps

For different UPS and FedEx service levels there are different rate caps. A rate cap is crucial for parcel shippers when it comes to saving money on shipments because it helps to keep rate increases in check. However, rate caps are limited only to transportation charges. Still, depending on the UPS and FedEx service levels where charges are expected to increase, negotiations can be made to limit that rate increase to improve savings.

Looking for parcel contract negotiation support?

It's no secret that parcel contract optimization and negotiation is challenging, especially when you're not familiar with making parcel audits. Fortunately, you don't need to sweat your parcel audits when you work with AFMS. AFMS has the experience you need for parcel shipping contract negotiations support. For more information about our freight pricing support and negotiation services, contact AFMS today.

​It's no secret that parcel contract optimization is necessary for both businesses and carriers what with over $2 billion in refunds and credits going unclaimed by U.S. businesses every year. In fact, according to the Washington Post, neither Amazon nor the Post Service knows for sure what the revenue from their parcel shipping contract is despite the fact that Amazon uses the Postal Service for up to 40% of its shipping.

​Parcel contract optimization ensures that both parties are acting in compliance with their shipping contract and that no party is being overcharged. Parcel contract auditors will analyze contracts for service errors and to determine if any refunds or discounts are in order.

However, the parcel contract optimization market has been affected by the COVID-19 crisis like many other markets have been, and the future of the market is expected to shift. That being said, what market changes can we expect to see and what trends should people be aware of? Here we'll dive into the parcel contract optimization market pre-and-post pandemic.

Pre-Pandemic: Carriers Shifting Gears

Prior to the pandemic, the parcel industry saw significant changes. FedEx chose not to renew not one but two contracts with Amazon, UPS signed a five-year labor contract, and the US nearly departed from the Universal Postal Union.

E-commerce deliveries were growing for multiple carriers. This was especially true for FedEx, which began delivering packages on Sundays via Ground. FedEx also started allowing FedEx Express to hand off some of its deliveries to Ground when they were in the last mile. The trends that were expected to come in 2020 included General Rate Increases from carriers, expectations from consumers for faster deliveries, and increases in carrier capacity.

Current Pandemic: What Is the Market Doing?

With so many Americans staying home and social distancing to combat COVID-19, the e-commerce market has climbed 49% and retail sales have dropped significantly. Additionally, mail volumes are falling and putting greater pressure on profit for the United States Postal Service. Parcel volumes are growing and helping profitability, but the USPS isn't able to profit through types of shipment.

What Trends Are Expected in the Future?

According to Barron's, the probability of change happening for the USPS and other carriers is higher because of the COVID-19 pandemic. Issues that may have seemed small prior to the pandemic are now highly visible, and some shippers specializing in consumer products may continue to see their volumes climb while overs will see declining demand.

Shippers who have seen their volumes decline ought to be wary of their carrier pricing and discount structure. With e-commerce shipments expected to continue to rise and the USPS looking to improve its profit margins, parcel contract auditing, negotiating, and optimizing will be more important than ever. That's where AFMS comes in.

AFMS has parcel pricing experts your business needs to analyze shipping contracts and to provide parcel contract negotiations. For more information on parcel shipping contract benchmarking and contract optimization, contact AFMS today.

​​Many businesses feel confident in their ability to review their own parcel shipping contract when the time comes to renew their contract with their carrier. However, parcel shipping contracts can be difficult to navigate when you're not entirely sure what you're looking at, and you might just end up paying more for shipping than you need to.

This is where the parcel contract pricing support of AFMS comes in. AFMS offers a wide array of services including parcel contract negotiation, parcel contract auditing, and parcel contract optimization to make sure you're getting the most bang for your buck. Here are some of the benefits you can expect to take advantage of when you get parcel contract pricing support.

Know what not to sign

When you choose to work with parcel contract pricing support, you can feel secure knowing that you won't be signing anything that could do your business financial harm. For instance, in many parcel contract negotiations, there's a carrier GSR waiver. Your business should never sign a carrier GSR waiver.

A carrier GSR waiver, or a money-back-guarantee waiver, can mean a loss of revenue between 3-5% for your business. With parcel contract pricing support, you could obtain better incentives and discounts by keeping the Service Guarantee Policy part of your agreement.

Catch possible overcharges

In 2018 alone, there are 87 billion parcels shipped worldwide. Depending on the number of parcels your company ships, it can be difficult to spot overcharges. The good news is that, with support from parcel contract auditors, you can determine whether or not your carrier is overcharging you for your shipments.

Parcel contract auditors can not only ensure that your carrier is acting in compliance with your contract but also that there are no refunds that are in order. AFMS can audit your contract to correct discounts, identify service errors, and more.

Identify changes in the contract

It's all too easy to overlook details and contract changes when you're conducting your own parcel contract negotiation. Unfortunately, even the smallest of contract changes can have a domino effect. An overlooked detail can impact transit times, discounts, and service errors. Professional support during your parcel contract negotiations reduces the risk of signing off on a change that could negatively affect your business.

Interest in working with parcel pricing experts? We've got you covered. For more information on parcel shipping contract benchmarking and contract optimization, contact AFMS today.

View Original Article On FedEx website by clicking here.

When planning your budget, it helps to know the estimated cost of shipping. Here are the details of our shipping rate changes for list rates, surcharges, fees and other factors that can affect your shipping rates. Plus, you can download shipping rates for FedEx Express, FedEx Ground and FedEx Freight.

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.