TEL: (516) 822-1183

Bracing for UPS and FedEX GRIs

/in /by

Prepare for Impact

First of all, Happy New Year to all of our clients and followers. We wish you all great success and prosperity in 2024! 

At this point, the General Rate Increases announced by Parcel Carriers are a distant memory for many.  Most shippers, especially retailers, were too busy to think about rates and contracts during the holiday peak season. 

But, now that the heavy holiday shipping volumes are behind us, it’s time to gear up for 2024. It’s not likely that you received any relief from the Parcel Carriers on the rate increases that went into effect within the last couple of weeks. So, you might be bracing for the 5.9% General Rate Increases that both UPS and FedEx just implemented. Maybe you have budgeted for this, and feel that your profit margins are safe and protected. Sorry to be the bearer of bad news, but you are probably wrong! 

Some shippers might not give this much thought due to them having Rate Caps in place with their carriers.  They might be comfortable with the amounts that were budgeted due to the “defined” rate increase that they have in place. Once again, sorry to burst your bubble, but you are also wrong. 

We have previously published articles that explain how the impact of General Rate Increases is often higher than percentages announced by carriers, or above Rate Caps that shippers have in place. This is also widely reported and communicated in the consulting community. 

It is fairly common knowledge that the driving force behind the disparity in actual vs expected impacts is driven by a shipper’s actual shipment characteristics, along with the impact of Accessorial Rate increases. These items definitely play a major role in inflating a shipper’s costs. 

For example, the Residential Surcharge is a very common accessorial charge for shippers. Both FedEx and UPS 2024 increases for these surcharges are above 7.5%! If you check out the lists of 2024 Accessorial Rate increases that we recently published, you will see that just about all of them are above 5.9%. Some are more than 20% higher than 2023!  It’s important to note that the announced GRI, and Rate Caps do not apply to accessorials. 

Zip-pity Do Dah

Sorry, but the bad news gets worse. If it’s not hard enough to figure out how your Parcel carrier costs will rise given the impact of Accessorial increases, there is another profit margin killer lurking in the background! The carriers have tried to warn you about this potential profit eating monster. But, most shippers didn’t pick up on it. 

In the General Rate increase announcements that carriers made this year, they stated that there will be changes related to specific zip codes. The UPS announcement pointed out two potential changes to zip codes.  

First, UPS pointed out that there would be changes to zip codes impacted by Area Surcharges (Delivery Area Surcharge (DAS), Extended DAS (EDAS), and Remote Area Surcharge (RAS). Below are details of the changes for 2024. 

Change# of Zip Codes ImpactedPotential Cost Impact per Pkg.
New DAS Zip Codes143Increase of $3.95 to $7.70
Moved from DAS to EDAS108Increase of $.95 to $2.00
Moved from EDAS to RAS321Increase of $6.45 to $9.25
Moved from EDAS to DAS465Reduction of $.95 to $2.00
Removed from DAS155Reduction of $3.95 to $7.70

It is encouraging to see that some zip codes will actually see a reduction in cost through these changes. There are actually more zip codes experiencing a decrease in cost than those experiencing an increase. 

However, it is imperative that shippers determine the net impact of all of these changes. Obviously, there is a much larger increase in cost per package for packages that move into the Remote Area Surcharge (RAS) category, compared to the reduction in cost for packages that moved from EDAS to DAS. There is only one way to determine the true impact of these changes, and we will get to that later. 

The second impact to zip codes that occurred with the UPS 2024 rate change is a bit less obvious to shippers. However, it could be even more impactful.  UPS had announced that “The list of ZIP Codes aligned to certain zones will change.” We have seen this type of announcement in the past. But, we were unable to identify any noticeable changes. But this year that has changed. 

ICC Logistics has been monitoring the changes to zones since this announcement was made back in December.  We recently completed a high level analysis that compared Zones for specific Zip Code origins for 2024 vs 2023. We determined that zones actually decreased for some origins, and increased for others. Below is a table that demonstrates some of our findings. 

Origin City/ StateOrigination ZipTotal # of zone changes# of changes to a higher zone
Mahwah, NJ07400
Hicksville, NY11810
Orlando, FL3272510
Plainfield, IN4605238
Dallas, TX7506236
Phoenix, AZ8503522
Goodyear, AZ8532318
Total Changes198124

As you can see, our study suggested that there were more zip codes that experienced an increase in Zone compared to a decrease. It also suggested that there were some origins that had no change at all. 

So, what are the implications of this? First, although the actual percentage of zip codes that were impacted were low, the increase in cost associated with zone increases could be substantial. The table below is based on UPS 2024 Published rates, and helps to demonstrate that an increase in Zone could have a big impact on cost per package. 

WeightZone 3 vs 2Zone 4 vs 3Zone 5 vs 4Zone 6 vs 5Zone 7 vs 6Zone 8 vs 7
1 Lbs.3.93%9.26%4.53%2.36%2.08%0.83%
511.07%9.89%8.55%4.03%5.43%7.01%
107.42%9.64%9.92%3.46%11.18%11.56%
157.10%5.22%12.76%15.32%20.40%10.72%
2012.51%2.14%23.01%16.46%21.66%12.14%
2516.81%6.87%19.68%22.94%20.61%14.08%
3018.63%9.76%19.80%24.82%16.19%17.78%
3523.03%11.82%18.43%24.23%18.18%17.66%

Also, we must point out that the increases portrayed here are on top of the 5.9% GRI that UPS had announced for 2024. So year over year impacts are greater than portrayed above. Once again, there is really only one way to determine the true impact of these changes, and as promised above, we will get to that later.

However, we feel that the biggest thing to consider here is the very fact that these zonal changes have been made. As we stated earlier, to our knowledge these types of changes have not been made by carriers for quite some time now. If they have been made, it has not been very apparent to anyone in the shipping world. 

The concern here is that carriers could take advantage of this somewhat sneaky way to increase their profits (at the expense of shipper’s profit margins).  Carriers may argue that they did not only increase zones on some zip codes. They will be sure to point out that they lowered zones in some cases as well! 

But at the end of the day, all that they have stated is that “The list of ZIP Codes aligned to certain zones will change.” There has been no guidance regarding the impact to shippers. We are fairly certain that if these changes would result in overall lower costs to shippers, carriers would be anxious to point this out publicly. 

What Now?

So by now you are most likely thinking “What should I do about this?”, or “How will these changes impact my company?”. Well as promised we will tell you how to get answers to these questions. The answer is simple. Be sure to reach out to ICC Logistics ASAP. Our unmatched analytical abilities, along with our proprietary database and processes will help you to determine the true impact of these changes. Even better, we will help you determine the best way to mitigate these unplanned/ unexpected profit damaging cost increases!

Beyond the Price Tag

/in , , , , , , /by

Cultivating a Value-Centric Parcel Carrier Relationship

Navigating the intricate dance of a shipper/parcel carrier relationship requires more than a keen eye on the bottom line; it demands a shift in dialogue from the immediate allure of price to the enduring promise of value. 

This philosophy is not just about deflecting attention but about guiding clients to a vantage point where long-term benefits outshine short-term savings. Its here that the client-focused consultants can truly excel, helping decision-makers to see beyond the price tag and embrace the holistic value of their investments.  

Understanding the Price-Value Dichotomy

The fixation on price is a natural inclination for clients seeking to maximize their immediate gains from parcel carriers. However, this narrow focus can eclipse the broader picture of total cost and long-term value. The art of consulting is not just about presenting a product or service; it’s about leading a client through a paradigm shift—from price-conscious to value-aware.

How to Shift from Price-Conscious to Value Aware

1. From Price to Total Cost: 

A good logistics consultant helps a client to see beyond the tip of the iceberg. The dialogue should illuminate how your carrier’s offering reduces not just the monetary cost but also the cost of time, potential waste, and inefficiency. By articulating the broader cost implications, a good consultant can reframe the conversation to focus on the comprehensive value your provider’s solution provides.

2. From Savings to Differentiation: 

The allure of savings is potent, but it’s the differentiation that sustains a business relationship. When price is the only factor, it’s crucial to help clients pivot the conversation to what sets a carrier’s offering apart. This shift is about showcasing the unique benefits and superior outcomes that justify the price difference. It’s not just about what the service is, but what the service does differently—and better.

3. From Narrow to Broad Needs: 

Simplistic needs invite simplistic solutions. By broadening the conversation to encompass the full spectrum of the client’s complex needs, you create more value for your client.  A parcel carrier should be a partner, not just a provider.

Empathy as the Gateway to Value

Each conversational shift begins with two powerful words: “I understand.” This empathetic bridge reassures the client that their concerns are heard and validated. A good logistics consultant will work with you to find a parcel carrier that understands this important dynamic.  It’s the starting point for a dialogue that transitions from a transactional interaction to a consultative relationship.

The Focal Point 

In the end, what remains focal is what becomes important. By maintaining a steadfast focus on value, our clients can elevate the conversation, transcend the commoditization trap, and make better decisions that are not just good for today but great for tomorrow.  Learn how ICC Logistics is different by setting up a free consultation today.  Let’s help you get the value you deserve out of your parcel carrier relationships.

U.S.P.S New Pricing Proposed

/in /by

U.S. Postal Service Proposes New Prices for 2024

New prices scheduled to take effect Jan. 21, 2024

Postal Service prices remain among the most affordable in the world, this of course is known as “USPS Speak.”

First-Class Forever stamp will be 68 cents

On Friday, October 6, 2023,the United States Postal Service filed notice with the Postal Regulatory Commission (PRC) of mailing services price changes to take effect Jan. 21, 2024. The new rates include a 2-cent increase in the price of a First-Class Mail Forever stamp, from 66 cents to 68 cents.

The proposed adjustments, approved by the governors of the Postal Service, would raise mailing services product prices approximately 2 percent. If favorably reviewed by the commission, (and there is no reason to believe the PRC will not approve these latest increases), the price changes would include:

ProductCurrent PricesPlanned Prices
Letters (1 ounce)66 cents68 cents
letters (metered 1 ounce)63 cents64 cents
Domestic Postcards51 cents53 cents
International Postcards$1.50$1.55
International letter (1 ounce)$1.50$1.55

There will be no change to the additional-ounce price, which remains at 24 cents. The Postal Service is also seeking price adjustments for Special Services products including Certified Mail, Post Office Box rental fees, money order fees and the cost to purchase insurance when mailing an item.

As inflationary pressures on operating expenses continue and the effects of a previously defective pricing model are still being felt, these price adjustments are needed to provide the Postal Service with much needed revenue to achieve the financial stability sought by its Delivering for America 10-year plan. The prices of the Postal Service remain among the most affordable in the world.

The PRC will review the changes before they are scheduled to take effect. The complete Postal Service price filing, with prices for all products, can be found on the PRC website under the Daily Listings section at prc.arkcase.com/portal/docket-search/daily-listings. The mailing services filing is Docket No. R2024-1. The price tables are also available on the Postal Service’s Postal Explorer website at pe.usps.com/PriceChange/Index.

Need help navigating pricing changes?  Don’t hesitate to reach out, our USPS experts are standing by.

UPS and DOWNS in the Parcel World

/in , , , , /by

UPS and DOWNS in the Parcel World

The rise and fall of FedEx and UPS stock prices, and what it means for you

If you have been following UPS and FedEx Stock prices for the past 6 months, you have probably noticed some major differences in performance. During this period, UPS Stock has seen a decline of over 18%, while the FedEx stock price has increased by almost 20%. While you may think that these swings are only important for the stockholders of these respective companies, we feel that this is equally important for shippers.

To explain this, the first important question to ask is, what is driving these major changes? If you have been following the blogs that we have been putting out for the past few months, you probably have a good idea already. 

We had been monitoring and reporting on the UPS/Teamster negotiations that started back in April. The negotiations were quite contentious, and ended with UPS providing an offer that the Teamsters touted as “Historic”, and that will cost UPS $30 Billion over the life of the new five-year agreement. 

UPS leadership has publicly debated how much this new agreement will actually cost the company. However, regardless of how much, it is pretty obvious that it is going to increase their costs in a meaningful way. 

The chart below illustrates the performance of UPS Stock price over the past 6 months. As you can see there was a big drop in value following the kick-off of negotiations, most likely driven by the negative sentiment and risks associated with a potential strike by the Teamsters. 

The stock has continued to fall following the completion of negotiations, and has seen a steady decline since UPS reported Q2 earnings at the beginning of August. This UPS earnings report acknowledged the loss of volume due to customer concerns of the outcome of their negotiations with the Teamsters. UPS also lowered its revenue outlook for the year following the outcome of the new agreement.

For FedEx, there has been a steady uptick in their stock price. As you can see in the chart below, their stock has risen substantially during the same period. 

FedEx earnings reports have suggested that they have been successful in reducing costs and have solid plans to continue doing so. However, they have also acknowledged the fact that UPS/Teamsters negotiations have helped them gain market share. 

FedEx’s chief customer officer, Brie Carere, said “We onboarded new customers who valued our service, and were committed to a long-term partnership with FedEx,” she said on the company’s earnings call Wednesday. “As a result, we added approximately 400,000 in average daily volume by the end of the first quarter.” She then went on to say “My job is to make it very difficult for our primary competitor to win back that share.”

In case you didn’t catch it, the statement made by Ms. Carere should be the aha moment that explains why these fluctuations in stock prices are important to shippers! The bottom line is that both carriers have a need for volume right now. The economy is soft, which is having a negative impact on volume. UPS needs to recoup volumes lost due to Teamster contract negotiations, and FedEx has won volume from UPS that they don’t want to lose. Seems like the perfect storm for shippers. This suggests that carriers might be willing to get aggressive with pricing to protect and or grow their volumes.

So, now you are probably thinking that you need to call your respective UPS or FedEx rep to try to take advantage of this situation. Maybe you have been successful in the past with obtaining better rates and discounts directly from your carriers. Maybe you have built and used successful strategies in the past that resulted in cost reductions for your company. But before you pick up your phone to call your reps, there are some very important questions that you need to ask yourself.

  1. How well do you understand your own Parcel Data? Do you have the visibility that you need to understand your shipment characteristics and trends of your parcel spend? Are you relying on data/reporting that comes directly from the carrier to understand your volumes? (bad idea #1) 
  2. How do you know that you will be able to obtain the best rates possible from your carriers? What do you have to compare this to? Are you going to bench mark new offers against your own existing rates and discounts? (bad idea #2)
  3. Do you have the ability to completely analyze and determine the true impact of offers that you receive? Will your analysis pick up on discount details that you feel will not be impactful, but actually are? Are you going to take your carrier rep’s word for it when they tell you that their new offer is going to save you money?  (you guessed it- bad idea #3!)

Our long term experience tells us that instead of picking up the phone to call your carrier rep, you should first pick-up the phone to call us. Here’s why; 

  1. The proprietary analytical program/process that we have built along with our associated Auditing & Reporting portal allows for unmatched visibility and reporting. THIS WILL TRULY ALLOW YOU TO UNDERSTAND YOUR PARCEL VOLUMES AND SHIPPING CHARACTERISTICS!  
  2. Shippers have no way of knowing that they are receiving the best rates and discounts possible on their own. Do not take your carrier rep’s word for it.  ICC Logistics utilizes a vast database of over $9B/yr. in carrier data that allows for highly accurate benchmarking of rates and discounts. WE KNOW WHAT THE BEST RATES AND DISCOUNTS LOOK LIKE!
  3. Our analysis will provide a true and accurate picture of the impact of all carrier offers. We have protected many customers from accepting offers that carriers claim would reduce costs, and that would actually have had little impact or even increase costs. DON’T BE FOOLED BY SMOKE AND MIRRORS!

So if you are looking to enter into negotiations with your carriers from a position of power, it is imperative to partner with a company that understands the process. Market conditions suggest that now is the time to dust off your parcel carrier contracts, and take advantage of potential cost reductions. The Parcel market is ever changing, and the pendulum can quickly swing back the other way as capacity tightens. We are certain that our approach to negotiations will help shorten the timeline and result in the highest level of savings possible. So, be sure to reach out to us today to get things moving right away! 

 

FedEx Announces GRI Early

/in , , , , /by

Surprise Surprise!

Most people like a nice surprise, especially when it’s a good one! Yesterday, the parcel shipping world received a nice surprise.  FedEx provided an earlier than normal announcement of their General Rate Increase (GRI) for next year. Surprisingly some of the increases that they announced were less than those imposed last year. FedEx announced that their rates for Express and Ground Services will increase by 5.9% (on average) in 2024. While it is nice to hear that the increase for FedEx is lower than expected, this is certainly no reason for celebration! 

Last year the GRI for both FedEx and UPS came in at 6.9%. Many experts, including ICC Logistics, have been predicting record level increases for Parcel Carriers in 2024, driven by the expensive new UPS-Teamster contract. It has been reported that this new agreement will cost UPS $30B over the next five years.

Early speculators are saying that this move by FedEx is designed to put pressure on UPS and their profit margins. It is hard to say how UPS will react to this. One would expect that they did have plans to push through a rate increase designed to soften the blow of the higher costs associated with the new Teamster agreement. We had expected a GRI of at least 6.9% by UPS. But, due to this new pressure in the market, they may be forced to mirror the 5.9% increases announced by FedEx, and find some other way to improve profit margins.

If UPS decides to go this route and match the FedEx 2024 GRI amount, they will need to find creative ways to improve margins. Let’s face it, UPS and FedEx are no strangers to creative pricing. First of all, it’s important to point out again that the announced GRI’s are just average increases. The actual impact of the rate increases will vary greatly for shippers. Many factors will drive the bottom line increases that a shipper will experience including average weight and zone of packages, package dimensions, increases in accessorial rates, as well as potential changes to accessorial rules and/ or the introduction of new accessorial fees. Also, the verbiage and elements of carrier agreements can affect the bottom line impact for shippers. 

Carriers have been using accessorials as a creative way to improve profitability for a long time. Many years ago, the Delivery Area Surcharge (DAS) was introduced by UPS and FedEx for certain zip codes. Then new categories of delivery surcharges were added, accompanied with higher charges. First the Extended Delivery Area surcharge (EDAS) came into play. In more recent years (2022 to be exact) – the Remote Area surcharge was created. This sneaky little surcharge carries a price tag of $13.05 per package in 2023 for UPS, and is typically not covered by discounting that shippers may have in place for DAS or EDAS. UPS published charges for DAS and EDAS are $5.30 and $7.15 in 2023. 

On top of this, both carriers usually make adjustments to the zip codes that these Delivery surcharges apply to. Our analysis has shown that UPS has continued to move DAS Zip Codes to the EDAS category and EDAS into the Remote Area Surcharge category.  In 2023 UPS had approximately 400 more Remote Area Surcharge zips listed than they did in 2022. We are speculating that this practice will continue in 2024 and beyond. 

Both Carriers have made changes to rules that govern Dimensional Weight as well as Additional Handling Charges over time. In 2015 both carries lowered their Dimensional Weight Factors from 166 to 139, which increased costs for most shippers. Both have also introduced new rules that apply to Additional Handling surcharges. For example, in 2016 both carriers lowered the length of packages (longest side) from 60 inches to 48 inches before the surcharge applied. New categories of Additional Handling have been added over time, and now include extra charges for specific weight, combined length and girth, length, width, as well as packaging. Published charges for Additional Handling vary from $16.50 to $34.50 for UPS and $16.50 to $36.00 for FedEx (per package). 

There are also many interesting rules that govern situations where carriers reserve the right to charge Additional Handling Fees. UPS has one listed in their Service Guide under rules for the application of Additional Handling for Packaging. It states that they can charge an Additional Handling Charge for Packaging for “Any article that is encased in a soft-sided pack (e.g., poly bags and bubble mailers) that exceeds 18 inches along its longest side or 14 inches along its second-longest side or 6 inches in height.” We know that many shippers use these larger size poly bags to ship their product (especially those that ship clothing/ garments). However, up until this point, we have not seen any wide scale enforcement of this rule. Not sure why, but this could be a creative way to help bolster profits.

So, our point with all of this is that it really doesn’t matter if UPS matches the FedEx GRI or not. The bottom line is that 5.9% is still a hefty increase!  On top of this, it is only an average, and the impact could be much greater for shippers, especially when the carriers start playing the “Smoke and Mirrors” games that they play. It is obvious that carriers have many levers that they can pull to help improve their profits. Many of these are not so obvious to the average shipper. 

The big questions are “What is the specific impact to you, the Shipper?” and “Do you have contracts that can help shield you from potential rate increases that can damage your bottom line?” We would expect that you don’t want to be unpleasantly surprised by unplanned/ unexpected increases in costs in 2024. ICC Logistics has a long history of delighting customers by driving significant cost savings that they didn’t know existed. Please reach out to us today to ensure that the surprise that you experience with your 2024 carrier rate increase impact is a good one! 

And, as an added bonus, ICC, (which we have done for decades now), will be publishing FedEx and UPS Rate Comparison Charts comparing 2023 rates, with the new 2024 rates just as soon as the revised rates are officially published by FedEx and UPS. Be on the lookout for this incredibly valuable information.  

UPS Teamster Update: It Still Ain’t Over

/in , , , , , /by

 A Good News, Bad News, Good News Story

Well the results are in-  UPS Teamster members have voted to accept the UPS contract offer that their leadership team had tentatively accepted back on July 25, 2023.  The contract was overwhelmingly accepted with 86.3 % of UPS Teamsters voting yes to the deal. Shippers no longer need to worry about the possibility of a strike.  Obviously this is the Good News Story. But what impact will this new agreement have on the market place and your business?  Our intent is to provide you with some insight regarding what to expect moving forward, and to help you build a strategy to minimize the impact of market changes. 

Now that we know the good news, let’s talk about the bad news.  There is probably no need for us to get too deep into the increases that UPS workers will receive through this new deal. There have been many stories in the media that describe how UPS Driver pay will go to $170K per year. Part time workers will see increases in pay by as much as 48% over the life of the agreement. Additionally, UPS made many other concessions that will prove costly for them in the coming years.

UPS Leadership acknowledged that the new Teamster agreement will have a big impact on their costs. In their latest earnings release earlier this month, UPS cut its full-year revenue and profitability targets, citing higher-than-expected labor costs and business lost during the contract talks with the Teamsters.

So, shippers that use UPS should brace themselves for the record level rate increases that ICC and other experts have been predicting for some time now. For those shippers that use FedEx and other parcel carriers, don’t think that you are off the hook. As we all know, history repeats itself. So, why wouldn’t FedEx just match the increases that UPS will announce later this year to help them improve their profit margins as they have in the past? This is really a no brainer. 

If you think that Amazon’s expansion into the Parcel delivery market will help keep costs down, guess again. The Teamsters have been very vocal about their desire to drive higher salaries for Amazon workers. Teamster General President, Sean M. O’Brien has been quoted as saying, “Teamsters have set a new standard and raised the bar for pay, benefits, and working conditions in the package delivery industry. This is the template for how workers should be paid and protected nationwide, and nonunion companies like Amazon better pay attention.”

Adding to the bad news is the recent Yellow Freight bankruptcy. Thankfully, in the short term, excess capacity in the LTL market seems to have staved off any major impacts on cost. But, what will happen as capacity starts to tighten during the upcoming holiday peak season? Estes and Old Dominion have made offers for Yellow Freight assets, which could help these carriers grow their respective market share. So, what impact could this have on LTL prices? Obviously still a lot of unanswered questions here. But, many things point to higher costs for the LTL market as well 

So now for some more good news. The bottom line is that smart shippers can plan ahead to help protect themselves from substantial increases in costs and further erosion of profit margin. Here are some of our recommendations for you to consider as you build your cost avoidance strategy; 

1.Time to Assess your Parcel and Freight Carrier Agreements. Many things need to be considered here. Many shippers have the ability and resources to take a high level view of where they stand with their Parcel Agreements.  There are some easy things to look at. For example, When does my agreement expire? Do I have any language in my agreement that would prevent me from renegotiating my agreement now? When was the last time I renegotiated my agreements? Is my company in a position to consider a move to another parcel carrier? How much has my business changed since I last negotiated my current parcel agreement? 

2.Time to take a holistic view of your current Transportation & Logistics Programs –  Many shippers are utilizing outdated Transportation and Logistics Systems . In many cases, these legacy programs were built at the start-up of the business, and never changed. They are often built around older internal systems, which limited the ability for changes in order fulfillment. Companies that started out regionally may now be selling nationally and globally. All of this results in added cost for shippers. 

Here are some questions to consider with this; What are your options? Are you in a position to consider the use of Regional Carriers, or other Final Mile, or Middle Mile Carrier options that have sprung up in the last few years? Can your current systems support the addition of new carriers? Are you using the right LTL carriers for your product/ customers/ market?  Is your current Distribution Center, or 3PL in the right place to ensure lowest cost/ fastest delivery to your customers? Should you upgrade your current TMS/ WMS systems? 

3. Time to talk to the experts – Many companies are hesitant or reluctant to bring in outside help or consultants. Transportation and Logistics leaders often feel that they know enough to negotiate their own deals and make their own decisions. CFO’s and other company leaders think they don’t need to bring in experts because they have the right people on their staff that have the expertise to ensure that they are getting the most from carriers. 

The bottom line is this- even if you have the best Logistics and Transportation people on your staff, there is no way for them to possess the vast data and insight that the experts can provide. Here is a great way to look at this. The best and most experienced Transportation and Logistics leaders probably have been involved in dozens of Parcel and Freight negotiations during their careers.  They also could have worked at many different companies. So maybe they have some good insight. However, Logistics consultants have been involved in hundreds or even thousands of Parcel and Freight negotiations, for hundreds/ thousands of different companies. Also, in many cases (like at ICC), they have sat at the carrier side of the negotiating table. 

The experts are much more in tune with current pricing and market trends. Parcel and Freight agreements usually have 1-3 year terms. A lot can change in the market during these time periods. Good consultants have a vast amount of recent carrier invoice data that can be used to benchmark against the current market. The experts are involved with this on a daily basis, so they know what to ask for and when and how to ask for it. 

Company leaders need to realize that Logistics consulting experts are not looking to replace, or make their Logistics and Transportation teams look bad. The main goal is to make these teams smarter/ stronger and to provide them with the tools that they do not have to help them drive the greatest savings possible, without compromising service to customers. 

Naturally, company leaders are often concerned about the cost of engaging with Transportation/Logistics consultants. The good news here is that most of these consultants are willing to work on a gain share basis, meaning that they will not pay anything unless the consultants can drive savings for them. It is not unusual for shippers that partner with a Logistics consulting firm to experience an ROI of 5X-10X or more. 

The ICC Logistics team has had tremendous success with helping customers build their own good news/ success stories. We are looking to continue to spread the good news. So, please reach out to us today to find out how we can help you prepare for the expected changes in the Transportation and Logistics marketplace. We are certain that we can deliver solutions that will protect your margins and enhance service to your customers.