How should your shipping plan change in 2022?

Shippers expect the annual increases, but 2021 was different and will continue to be different into 2022, and maybe even indefinitely. The continuous rise in surcharges and rates makes it increasingly challenging for shippers which is leading to researching other carriers in addition to UPS and FedEx or going with the one with better rates. But are the rates better?

General rate increases (GRI) begin in September or October every year; with the rate increasing from 4 to 6 percent annually. It is important to remember that fuel costs are not included into General Rate Increases. Fuel surcharges are separate charges, along with several other surcharges. Shippers may be unaware which surcharges they are paying or how much this is eating into their profits.

The first step is to thoroughly look at the published shipping rates. Are you paying the published rates? Hopefully, this is not the case. Often, shippers are receiving good rates, but several accessorial/surcharges are being applied which changes the entire snapshot of their carrier agreement. Shippers may receive great rates in areas they never use such as international shipping. Knowledge of the carrier’s rates and the services provided can help shippers fully understand who has the more optimal delivery service.

The second step is to review all shipping data. By gathering all data in one place and utilizing sophisticated, accurate software makes it easier to analyze rates, shipping trends month by month, from DC to DC, state to state, capacity, delivery times, carrier services and many more options. Other areas to study are the amounts of damaged claims, accessorials as percentage of freight, invoice accuracy, and just overall driver performance. This important data will show which areas your business should focus on to plan for better success.

The third step is to look for optimization opportunities. Shipping data must be analyzed in an ongoing systemic process to uncover billing errors and overcharges, as well as look for optimization opportunities. Working with an experienced shipping advisor who can provide parcel advising assistance can help make these ongoing issues easier for shippers.

Auditing and optimizing is a zero-risk practice that can significantly improve your bottom line. The ACT process of monthly scrutinizing and analyzing shipping data allows us to collaborate with your team to offer solutions to reduce costs and address your inbound and outbound shipping challenges.

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