|
|
|
UPS and FedEx Confirm What We Already Knew 11/20/06 As of the first of the year, both carriers will significantly raise their rates, and change how they calculate oversize shipments (though this change will come in Feb. for FedEx). PLEASE READ THIS CAREFULLY - The UPS rate increase is being stated as a 4.9% average increase on ground and air shipments, but apparently, this includes a 2% drop in the fuel surcharge (FSC) rate. So while this sounds like a good thing, my problem with this is that the FSC can go back up at anytime. So I believe you have to look at this as a whopping 6.9% increase in your base rates, since it is so very likely that the prices of fuel will continue to fluxuate, and likely go back up. Interestingly, the FedEx rate change is being spun the same way, with their average rate increase being touted as a 3.5% increase, though it is really a 5.5% increase with a 2% drop in the FSC. This will have a significant impact on all shippers, as again, the rate change is being touted as an average increase across all zip codes. What that means, is that some zip codes will have a higher increase than others. Yes, that’s right, incredibly some zip codes will get more than a 6.9/5.5% increase. Additionally, there are also supposed to be changes as to how FSC costs are calculated on some transportation based surcharges, like Residential and Delivery Area Surcharges. As mentioned above, there will be a SIGNIFICANT change to how oversize ground packages are rated. Domestic ground packages that exceed 3 cubic feet (5,184 cubic inches) will be rated using the formula [L x W x H divided by 194], ground to Canada will use [L x W x H divided by 166]. The billable weight will be based on whichever is greater, actual weight or dimensional weight. However if the package actual weight is greater than 70lbs, there will also be an Additional Handling Charge applied (though some rates above 70 pounds have actually come down). More to follow, but it seems pretty obvious to this writer that this is going to make stockholders happy, but probably not shippers. If you are concerned about how this will directly impact your company, and would like to talk about "counter-measures" you can take, than perhaps we should talk. Call 248-630-1326. MUST READ Rate Change from Parcel Shipping Distribution Magazine. Debunk the spin-doctors, and really understand how the rate change will affect your bottom line. UPS Press Release on 2007 Rate Change |
Copyright © 2004-2009
Advanced Carrier Technologies
|