The pricing power pendulum has swung back to shippers - ShipRx
Blog / The Pendulum Swings Towards Shippers
2 minutes read

The Pendulum Swings Towards Shippers

Last week, we told you that UPS and FedEx were the only two carriers going all in on peak surcharges this season. USPS did away with them altogether, and Amazon got rid of its peak surcharges on ground shipping while keeping it for third-party sellers.

Despite the pair’s public stance that it would remain firm on these demand charges, major retailers report receiving offers of savings on transport costs from the carriers’ sales representatives. Even if your sales rep hasn’t been in touch, this indicates that UPS and FedEx are open to negotiations.

Don’t sit by and watch others benefit from this current climate. Find out how you can join in on the savings. In this blog post, find out why FedEx and UPS are offering discounts now, predictions about this holiday season’s shipping trends, and how you can join the companies benefitting from reduced shipping rates.

Why the wiggle room?

In recent history, the rates set by UPS and FedEx left little room for negotiations; the carrier has always had the upper hand. Last week, Reuters announced that customers are “easily winning discounts” from them. So, what’s different now?

Demand rose during the pandemic, but carriers weren’t prepared for the increase in volume, forcing customers to switch to other carriers or find alternate solutions to supplement the overflow. With a choice in customers, UPS and FedEx held the power and gave priority to higher-paying customers.

Times have changed. Deloitte predicts lower holiday sales growth than we’ve seen in the past five years. And we expected an 8 million/day drop in volume from last year’s daily package send. With lower demand and an increased number of smaller carriers on the scene, shippers can (and will) choose the supplier offering the lowest rates.

UPS and FedEx aren’t advertising discounts… so how do we know they’re offering them?

Oh. We. Know.

The carriers haven’t spoken publicly about discounts, but large companies are reporting discounts between 10-40% on their shipping costs and waived penalties for things like canceled package delivery requests.

In some cases, sales representatives proactively offer large corporations discounts and benefits. But you may still be eligible for discounts, even if you haven’t been offered a deal.

While parcel rates are dropping for some, FedEx and UPS aren’t just going to offer discounts to all voluntarily. Many shippers assume they’re paying the lowest rate possible and don’t know they can negotiate in the middle of their contract.

The team at ShipRx has more than 30 years of experience in this industry, and we know the ins and outs of parcel rate negotiations. As fixed costs rise for the carriers and demand is falling post-pandemic, it’s more important than ever for UPS and FedEx to lock in long-term contracts— even if it means discounting rates to secure them.

Many shippers will miss out on this opportunity to save. Don’t be one of them. Get in touch with ShipRx today for a free savings analysis and start paying less— even as rates rise.


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