FedEx recently announced changes which will affect shippers that have “oversize” packages. They are reducing the size of shipments that will be deemed to be oversize by 20% (from 60 inches on the longest side to 48 inches). And they are setting a minimum billable weight of 90 pounds for oversize packages, unless your contract has exemptions that address this issue.
Coupled with the previous UPS announcement regarding a mid-year increase that includes a hike in its large package surcharge from $80 to $90—an increase of 12.5%— shippers will be paying more money to move oversize shipments.
And let’s not forget the fact that shippers will once again be seeing peak surcharges this fall.
Here are a couple things to keep in mind when considering these changes:
- Small changes are adding up in a big way for shippers! Whether it’s DIM factors or issues associated with oversize shipments or additional handling fees, you can expect to see significant increases in shipments moving through the parcel networks— unless you address these factors in your contract negotiations.
- How well does your company understand DIM issues? For that matter, relatively few companies understand how much of a truck/trailer is used for their shipments. But FedEx and UPS have a lot of data and they know how your shipments impact their networks.
- Armed with this data, FedEx and UPS have a huge advantage when it comes time to negotiate their contracts with you.
How can you level the playing field and manage your freight budget? By taking advantage of the right tools. For example, our Parcel Toolbox has proven to be very effective tool in helping shippers identify the economic impact of proposed changes in their parcel contracts. It will also help you understand the critical issues that can and should be addressed in your negotiations with FedEx, UPS and the USPS. That is why I’d strongly recommend taking a look at our Parcel Toolbox. It will help you to evaluate how these changes and other factors could impact your budget.
And before we sign off, if you haven’t yet contacted us about our Rapid Assessment process, may I recommend sending me an email or giving me a call at 630-833-0890. Why am I a big believer in this process? Because I know it has helped companies identify the best options they have to reduce costs. It has also provided useful insights on how to address the changes that should be considered to manage your freight costs in this turbulent environment.
We provide all of this because we're on your team, here to help, and passionate about seeing you stay on top of rate increases.
