TEL: (516) 822-1183
ICC - UPS Rate Increase - 2016 - Breaking News

UPS adds “Peak Season” Shipping Surcharges

/in , , , /by

We’re not sure if parcel shippers have been getting accustomed to having their rates increased every few months, but whether they are getting used to it or not, the parcel carriers are in the driver’s seat for sure; at least for now.

UPS has just announced another wave of surcharge increases, some going into effect on July 1, 2021.  UPS states in their official announcement that these increase are necessary for them to “ensure businesses and customers are able to meet their shipping needs while demand has increased for shipping services.”

Read the official announcement and get more details here.

As UPS goes, FedEx will probably be right behind with their surcharge increases.  And remember, we are not anywhere near the official “Peak Shipping” season.  The reality is that for as long as the parcel carrier volumes increase at record paces, shippers will need to adjust their budgets on a quarterly basis.  Annual Shipping Budgets are a thing of the past.  In addition, Single Sourcing may become a thing of the past as carrier capacity constraints will continue, at least for the foreseeable future so shippers will need to find other outlets for their excess parcel capacity.  But remember, the pendulum swings in both directions and if we have a downturn in the economy, which is a real possibility in the near future, the parcel carriers may be more inclined to “pay back” some of these increased costs with deeper discounts to retain their customers.

And, let’s not forget that the best thing a parcel shipper can do is have their parcel shipping costs Benchmarked by an Independent Third Party on a regular basis to make sure they are not paying more than they should, based on their ever-changing shipping characteristics.

Contact us today to learn more.

FedEx Announces Updates to Fuel Surcharges

/in , , /by

As a reminder, back in May, FedEx announced that they would be updating their Fuel Surcharge Tables to better reflect current market conditions.  FedEx, as well as all other freight carriers adjust their Fuel Surcharge percentages on a weekly basis as the price of fuel fluctuates.  This amendment to FedEx’ Fuel Surcharge Tables will officially go into effect on June, 21, 2021.

The updates will result in a change in the Price per Gallon bands used to calculate both US Gulf Coast Spot Prices for Jet Fuel, (applied to FedEx Express Service rates), as well as the US Highway Average Price of Low Sulphur Diesel Fuel, (applied to FedEx Ground services.)  It is expected that these rate table changes will result in an overall Fuel Surcharge increase of approximately 1%.  This is on top of already increased costs of fuel, as well as many new and ever increasing surcharges and accessorial fees.  While carriers may believe these increases are not staggering increases, they are increases non-the-less.  Let’s also keep in mind that recent reports indicate the rate of inflation is also increasing and that too will result in higher prices across the board for all consumers.  It’s like the old saying of being “Nickeled and Dimed to Death.”  However, as we have seen over the past year and a half, we are not talking about Nickels and Dimes, but rather dollars and serious ones at that.

The Fuel Surcharge Tables FedEx is published will become effective on 6-21-2021.

Looking for ways to control rising parcel shipping costs? Check out our carrier rate negotiations services.

 

USPS’ Upcoming Price Change

USPS Proposes Rate Changes

/in , /by

As part of “Delivering for America,” its 10-year plan to achieve financial sustainability and service excellence, the United States Postal Service filed notice last Friday with the Postal Regulatory Commission (PRC) proposing price changes to take effect Aug. 29, 2021 that are in accordance with the rules recently established by PRC last year.

The proposed price changes would raise overall Market Dominant product and service prices by approximately 6.9 percent. First-Class Mail prices would increase by 6.8 percent to partially offset declining revenue due to First-Class Mail volume declines. In the past 10 years, mail volume has declined by 46 billion pieces, or 28 percent, and is continuing to decline. Over the same period, First-Class Mail volume has dropped 32 percent, and single piece First-Class Mail volume — including letters bearing postage stamps — has declined 47 percent.

“For the past 14 years, the Postal Service has had limited pricing authority to respond to changing market realities,” said Postmaster General and CEO Louis DeJoy. “As part of our 10-year plan to achieve financial sustainability and service excellence, the Postal Service and the Board of Governors are committed to judiciously implementing a rational pricing approach that helps enable us to remain viable and competitive and offer reliable postal services that are among the most affordable in the world.”

The proposed Mailing Services price changes include:

ProductCurrent PricesProposed Prices
Letters (1 oz.).55 cents.58 cents
Letters additional ounce(s).20 cents.20 cents (unchanged)
Letters (metered 1 oz..51 cents.53 cents
Domestic Postcards.36 cents.40 cents
Flats (1 oz.)$1.00$1.16
Outbound Int’l Letters$1.20$1.30

Under the current pricing model and the proposed rate change, the Postal Service still has some of the lowest letter-mail postage rates in the industrialized world and continues to offer a great value in shipping.

The Postal Accountability and Enhancement Act (PAEA) of 2006 capped price increases for mailing services at the Consumer Price Index (CPI). The PAEA also required the PRC to evaluate the price cap system 10 years after the date of enactment and to modify or replace the system if it was not meeting the objectives of the law. The PRC recognized the price cap was a barrier to the Postal Service’s financial sustainability in December 2017, resulting in cumulative lost gross revenue opportunity of $55 billion. In May, the Postal Service reported a net loss of $82 million for the second quarter of 2021.

In November 2020, the PRC announced new rules on market-dominant prices, allowing above-CPI price increases on the basis of certain factors and allowing the Postal Service more flexibility in establishing prices for mailing services.

“November’s PRC ruling allows the Postal Service higher rate authority in establishing prices for mailing services,” said Chief Financial Officer and Executive Vice President Joseph Corbett. “Aligning our prices for market-dominant products will allow us to grow revenue and help achieve financial sustainability to fulfill our universal service mission.” Read more

Ocean Freight Rates on the Rise With No End in Sight!

/in , /by

As we have been accustomed to seeing over the past year and a half, additional ocean freight rate increases are on the way again; this time beginning in the third quarter of 2021.  So, as we get closer to Peak shipping season, we can be assured that this trend is now officially the norm, rather than the exception.  And, what we have been learning over the past year and a half is that all importer’s freight budgets will be tested to the limit and beyond.  At what point will we see companies cutting back on imports especially for those products with small margins of profit.  On the other hand, will this trend now entice more and more companies to source their goods closer to home?  Only time will tell!

Effective July 1, 2021, a General Rate Increase (GRI) has been filed for all cargo imported from Asia ports of loading, to U.S.A., Canada, and Mexico ports/ramps of discharge.

The proposed increases are as follows:

USD     900 / 20′

USD   1,000 / 40′

USD   1,125 / 40′ HQ

USD   1,125 / 40′ Reefer

USD   1,266 / 45′

USD   1,600 / 53′

Looking to gain control over rising costs? Contact us today to learn more.

USPS’ Upcoming Price Change

US Postal Service Package Volumes Surge

/in , , , /by

The US Postal Service has reported total revenue of approximately $18.9 billion for the second quarter of fiscal 2021.  This represents an increase of approximately $1.1 billion, or 6% compared to the same quarter last year.

As a result of the Covid-19 pandemic, as well a continuing decrease in mail volumes, the Postal Service’s sales from mail services, (its largest sales category), continued to decline during the second quarter. Compared to the same quarter last year, Marketing Mail revenue declined by $511 million, or 13.7 percent, on a volume decline of approximately 2.3 billion pieces, or 13.5 percent. First-Class Mail revenue decreased by $390 million, or 6.1 percent, on a volume decline of approximately 1.1 billion pieces, or 7.9 percent, compared to the same quarter last year.

Shipping and Packages Increase

Meanwhile, to no one’s surprise, the Postal Service’s sales from Shipping and Packages increased by approximately $2.0 billion, or 33.6 percent, on a volume increase of 376 million pieces, or 25.3 percent, compared to the same quarter last year, as a result of the surge in e-commerce associated with the COVID-19 pandemic.  And as we all know this trend is expected to continue at least through the end of calendar year 2021 and beyond.

In addition, service performance improved in the 2nd fiscal quarter, and service improvements are continuing. USPS also anticipates ongoing network infrastructure investments, such as the installation of new package processing equipment, will meet customer’s evolving needs ahead of the 2021 Peak Holiday Shipping Season.

Delivering for America 10-Year Plan

“The financial results for the quarter and the ongoing trend of declining mail volume and increasing package volume highlights why our “Delivering for America 10-year plan” needs to be fully implemented,” said Chief Financial Officer, Joseph Corbett. “The plan delivers the framework for us to better innovate to grow revenue, work more efficiently and achieve financial sustainability to fulfill our universal service mission. If the plan is implemented in its totality, we expect to achieve break-even operating performance over the ten-year period and positive net income by FY2023 or FY2024, reversing $160 billion in projected losses over the next decade.”

Excluding non-cash workers’ compensation adjustments, total operating expenses were approximately $20.6 billion for the quarter, an increase of $872 million, or 4.4 percent, compared to approximately $19.7 billion for the same quarter last year. Actual total operating expenses, including the non-cash workers’ compensation adjustments, were approximately $19.0 billion for the quarter, a decrease of approximately $3.4 billion, or 15.1 percent, compared to the same quarter last year.

Compensation and Benefits

Compensation and benefits expense increased by $517 million, or 4.4 percent, compared to the same quarter last year, primarily resulting from higher work hours associated with the package volume growth, contractual wage increases and an increase in paid leave associated with the COVID-19 pandemic.

The USPS is serious about its ability to become a major player in the minds of parcel shippers, and not a second tier choice, as they had been associated with in the past.

Are you shipping with USPS?  Contact us today to learn how we can support your shipping with USPS.