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Freight pricing specialists AFMS, CEO Mike Erickson, gives an inside track on best practices to negotiate best-in-class shipping rates with major carriers in North America and beyond.
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During this past year we have all experienced change as our businesses and communities navigate through this challenging time. We remain committed to making a difference investing in the strength of our global network of employees to positively impact your business.
Read Announcement on UPS.com
Update: Effective October 18, 2021 and until further notice, UPS is making the following operational adjustments: Delivery commitment times for UPS Next Day Air® destined to residential locations with a typical delivery time of 10:30 AM will be extended to 12:00 PM. Any applicable Service Guarantee with respect to these packages will be based on these revised delivery commitment times.
Effective March 26, 2020, we suspended the UPS® Service Guarantee for all shipments from any origin to any destination. For all U.S. origin shipments, the Service Guarantee suspension became effective as of March 24, 2020.
The UPS Service Guarantee has been reinstated for the following services only:
The Service Guarantee remains suspended for all other UPS® shipments not specified in the above sections, from any origin to any destination.
As the effects of the Coronavirus impact our infrastructure, we will continue to seek guidance from local, state, and national government entities to ensure that we fully align with their regulations. We are committed to continue operating globally except where constrained by government restrictions.
Prior to shipping, please check to see if the recipient’s location is open, since many some businesses’ hours may have changed either due to local restrictions or at the business’s discretion. We will make three routine delivery attempts* before returning a package to the sender. Please continue to visit this site for the most up-to-date information regarding the impact of Coronavirus on UPS services.
*Where three routine delivery attempts do not coincide with a recipient’s adjusted (e.g., shortened, or weekend-only) business hours, the package will be returned to sender.
For your convenience, The UPS Store® and UPS Access Point® locations all provide access to your vital deliveries. Where available, you can sign up for free UPS My Choice which enables you to provide more specific delivery instructions such as where to leave deliveries, or redirect deliveries to another location, and also provides you with the ability to receive delivery notifications.
Service guarantees are subject to change. For further details, see the UPS Tariff/Terms and Conditions.
Effective June 13, 2021, UPS will apply additional Peak increases to those international shipments originating in Japan destined to Canada. Previous increases, that were set to expire on June 12th, will continue to be applied on a per/pound basis. Depending on the service used, expect to see increases ranging from 67.6%-200% (on a per/lb. basis). All other previously announced surcharges will “continue until further notice”.
Although UPS did not take this opportunity to make changes to key Domestic Peak surcharges (as did FedEx several weeks ago), it is the collective wisdom amongst analysts that suggest additional hikes are on their way.
Specific details can be found at:
Effective June 13, 2021 until further notice, the amount of the Peak Surcharges applied to certain international shipments originating from Asia, including Japan will increase. All other previously announced Peak Surcharges will remain unchanged.
Review a detailed listing of the applicable Peak Surcharges.
Peak Surcharges are subject to change and Peak Periods may be extended or otherwise changed. The latest information on Peak Surcharges will be available at ups.com/peaksurcharge.
FedEx remains inundated with elevated parcel volume stemming from continued online shopping resulting in longer delivery times, service blunders and upset customers. According to ShipMatrix, from March through mid-April, about 87% of FedEx Ground shipments arrived on time, compared with 95% for the similar service at UPS.
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.
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.
FedEx rings in New Year by adding Resi-Surcharges, DAS realigned
UPS makes good on extending Peak Surcharges
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.
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.
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On a sequential week-over-week basis, it would appear that FedEx Corp. (NYSE:FDX) and UPS Inc. (NYSE:UPS) are holding their own in delivering holiday packages on time. Year-over-year, as might be expected, is a different story.