Surprise! Just when you thought the dust had settled on the 2020 rate increases, UPS and FedEx announced major increases that could wallop your transportation budgets!
The biggest surprise was an “additional handling surcharge” recently issued by UPS and FedEx for packages weighing between 50 to 70 pounds that will take effect when the 2020 rates kick in, which is on December 29 for UPS and January 6 for FedEx. Currently shipments under 70 pounds are exempt from this charge.
This is just one of the changes that have been announced. So let’s make this easy. I know you’re extremely busy but if you want to understand why and how these changes could impact your transportation budget, you need listen to my recent interview with parcel expert Jerry Hempstead.
After listening to Jerry, I hope shippers will heed his advice to check the wording in the “Terms and Conditions” section of their contracts with UPS and FedEx. This will determine how and when these charges will apply.
We haven’t talked to a single shipper that’s factored this new weight break into their budget for 2020! So for those who are too busy and can’t find thirty minutes to listen to this interview and educate yourself about the impact of these changes and Jerry’s tips about how to mitigate these changes, good luck. You’re on your own!
These new charges come on top of an overall increase of non-contract rates by about 5% from both FedEx and UPS, which announced their 2020 rates in mid-September and November respectively.
Great negotiators will be able to lessen the pain, but even with great discounts, shippers could still be looking at cost increases around 15 or 20%. From a list price perspective, these charges could result in a 50% increase for packages in this weight range. Mid-size shippers who don’t have negotiating leverage will be the hardest hit.
One final note. For those shippers who say “We don’t need any help,” they might want to consider Jerry’s observation that most people would never walk in to a court by themselves if they were being charged with a felony. I know, it’s a bit extreme, but there is a reason why they say: “A person who represents themselves in court has a fool for a client!”
After you listen to the interview, we have some great resources that can help you gauge the impact of exploring alternatives. So send us an email or give us a call at 630-833-0890. We’re on your team, here to help and passionate about seeing you manage your parcel and other logistics operations well in 2020.
