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.
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