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Shipping costs are soaring and it’s only going to get worse in 2020

Through a series of podcasts, trade conferences and various articles, Spend Management Experts summarizes what you need to know about the shipping cost rate increases for 2020.

SME Thought Leadership

Spend Management Experts is recognized as a thought leader in the logistics industry, with a deep and narrow focus on transportation optimization.  Click on any of the links below to learn more about shipping cost rate increases for 2020.


NOV 21 2019: UPS Publishes its 2020 Rate and Surcharges – Effective Dec 29, 2019

OCT 14, 2019: UPS and FedEx peak season delivery charges ‘have more lasting bite this year’

SEPT 19, 2019: As Expected, an Average 4.9% Rate Increase Announced by FedEx

 

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How to Forecast & Analyze the Impact of Carrier Accessorial Increases

Highlights from John Haber’s presentation on increasing shipping costs at the Parcel Forum 2019 in Dallas.

SUMMARY

2020 shipping costs are soaring because service providers have changed the game.  Large shippers are bombarded with price increases, costly policy changes and a myriad of new surcharges. And, they are impossible to evaluate and mitigate without technology tools and insider knowledge. What’s worse is the carriers are getting away with it because it is very complex and there is not enough competition.

Policy Changes and Accessorials (added fees) are the primary culprits to increased rates in shipping packages.  Unfortunately, they are usually not announced publicly and can cost an exponential increase in the cost.

There are over 300 accessorials between UPS and FedEx.

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How to Ship Large Bulky Items

Highlights from the presentation Melissa Runge, VP Analytical Solutions, gave at the Parcel Forum 2019 in Dallas.

SUMMARY


It’s no surprise that E-Commerce shipments are on the rise.  In 2019, E-Commerce sales were the same percentage of total sales as brick and mortar retail sales.  With this surge in E-Commerce comes the desire of consumers to receive large bulky items to their doorstep with the same level of customer experience as small items.  However, Small Parcel Carriers DO NOT want these oversize packages in their network because they require additional handling which squeezes MARGINS.

In response to this, Small Parcel carriers are increasing surcharges at a rapid rate.   These surcharges vastly exceed the total freight for shipments. On average the cost of these surcharges are rising more than 15% YOY where the general rate increase  for shipping costs is 4.9%.

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