It's not you, it's them. Shipping costs on the rise
If you feel like shipping costs are rising faster than ever before, it’s not just you. The major carriers are raising their rates at a pace we haven’t seen in over a decade. As a result, online retailers and e-commerce businesses are struggling to determine the next steps. One option is to pass the increased fees on to the customers. However, with Amazon offering fast, free shipping, passing on the charges may cause a total loss of the sale. In response, many businesses are offering “free shipping” while increasing the price of their products across the board, which also runs the risk of losing the sale to the competition. And of course, eating the cost isn’t feasible if you want to remain profitable.
FedEx’s largest rate increase in a decade
We’re no strangers to yearly price hikes from the major carriers. Most years, the rates increase by an average of 4.9%. Not this year.
At the end of September, FedEx announced that their rates for FedEx Express, FedEx Ground, and FedEx Home Delivery would increase by an average of 5.9% on U.S. domestic, U.S. export, and U.S. import services, effective January 3, 2022. FedEx Freight rates are increasing even more, with some customers seeing a 7.9% rate increase.
This rate increase comes on top of the following new surcharges:
- Increased fuel surcharge
- No Shipment Tendered surcharge
- Changes to International Out-of-Delivery-Area Surcharge and International Out-of-Pickup-Area Surcharge
- Changes to Delivery and Returns Surcharges
- Additional Handling Surcharge and Oversize Surcharge
The reason for these surcharges and rate increases? Their press release states, “These changes reflect incremental costs associated with the challenging operating environment, while enabling FedEx to continue investing in service enhancement, fleet maintenance, technology innovations, and other areas to serve customers more effectively and efficiently.”
UPS has not yet announced their rate increases for 2022, but we expect them to follow suit with a similar rate increase soon.
Rates going up? We can help!
If you’ve been impacted by the rising costs of materials and labor shortages during the past year and a half, the increased shipping costs may feel like the straw that broke the camel’s back. Don’t panic. Call ShipRx.
Our team of shipping experts has spent our careers negotiating parcel rate contracts— for the carriers first, and now for businesses just like yours. Most of our clients see their shipping rates decrease by 20 – 30% after they work with us on their parcel rate negotiation. Wondering whether you’re paying too much for shipping? It’s free to find out. We only get paid when you’re saving money, so you can be sure that we’ll give you an honest assessment.
With carrier rates on the rise, now is the time to lock in lower rates and negotiate caps on shipping increases. Get in touch today, and let’s get started!
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