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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

 

How to Mitigate Rising Shipping Costs: the 2020 FedEx & UPS Pricing Increases

In partnership with Supply Chain Radio Now, SME has produced Transportation Trends Series to explain, review and analyze the FedEx and UPS parcel rate increases for 2020. There will be a total of three podcasts covering the 2020 parcel rates. Below are highlights of the first two.

Check back soon for the 3rd podcast comparing UPS and FedEx.

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HIGHLIGHTS


In this conversation, Co-hosts Scott Luton and Greg White spoke with John Haber, CEO of Spend Management Experts, about how companies can mitigate the cost increases associated with FedEx’s and UPS’s 2020 rates. John also provides insight into:

  • The detailed list of 2020 surcharges already released by both carriers, as well as the massive impact of policy changes
  • The market conditions driving shipping increases
  • The potential of alternate approaches such as crowdsourcing, partnering with bricks & mortar locations and SME’s transportation optimization model

Listen to the full podcasts here.


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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

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 that are impossible to evaluate and mitigate without technology tools and insider knowledge. And the carriers are getting away with it because it is very complex and there is not enough competition.

Accessorials (added fees) and Policy Changes are the primary culprits to increased rates in shipping packages.  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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