Carrier Surcharge Increases: Watch Your Weight
This time of year, it’s easy to let your weight get out of control — parties and family gatherings and holiday happy hours all add up, right? But yours isn’t the only weight you should be watching.
As we flip the calendar to 2020, UPS and FedEx are both implementing additional handling charges for packages weighing more than 50 pounds. Previously, neither carrier applied surcharges until packages exceeded 70 pounds.
Both UPS (beginning Dec. 29) and FedEx (starting Jan. 6) are lowering the threshold for the additional handling surcharge because their systems are being flooded with packages that need — you guessed it — additional handling. Because so many large, heavy and oddly shaped items are now being ordered directly by consumers more frequently, carriers have to accommodate these changes with additional fees.
2020 General Rate Increase is indeed general
You’ve likely gotten information from your carrier about the 2020 General Rate Increase and might have breathed a sigh of relief that it’s only 4.9%. (Both UPS and FedEx announced this rate this fall.) But not so fast — that is, in fact, the general rate. Your business could be hit much, much harder, depending on your shipments’ weights, dimensions and packaging.
For instance, let’s say you send a 51-pound Zone 4 commercial ground shipment via FedEx. Today, that will cost you $29.11, but in just a few weeks, that cost will balloon to $54.30. Is your budget prepared for that 87% increase?
A similar increase is in store for you if you use UPS. A 51-pound Zone 4 package sent via UPS Ground would be $29.05 today but will be $54.74 after the additional handling fee is applied — a bump of 88%.
Not quite 4.9%, now is it?
Find out how rate increases will affect your business
Every business is different, so the effects of increases each carrier has instituted for 2020 will be different too. You’ll need to clearly understand the rates and your own shipping profile to really dig in.
What’s in a shipping profile? A lot, but the short answer is that it’s tons of data about your shipments and the trends of those shipments over time. Your carrier uses this data to set up your contract, and you’d better believe they’ve ensured that they’re taken care of in the arrangement. But are you?
You’ll never know until you dive into the data for yourself. In our 2020 GRI guide, The GRI Pressure Is On: Is Your Business Prepared?, we help you make sense of carriers’ increases and how they might affect your unique business.
Depending on what you ship and where you ship it, you could be looking at significant increases in your spending on shipping. Start planning now to avoid an expensive mess in 2020.