We are two months away from 2023, and although FedEx announced their rate increases early, UPS has kept customers guessing – until now. Just days before announcing its third-quarter earnings, UPS revealed that it would match rival carrier FedEx with a 6.9% general rate increase, which goes into effect on December 27, 2022. We will tell you everything you need to know about the UPS rate increase and how to combat both UPS and FedEx’s unprecedented increases.
Last month, we filled you in on FedEx’s worst day ever. When the carrier revealed that its projected revenue for the year fell far below expectations, stocks took a dive. A 6.9% rate increase, along with other planned cuts will help rectify their losses.
In contrast, UPS just announced that its Q3 consolidated revenues total $24.2B- up 4.2% from last year and its consolidated operating profit is $3.1B- up 7.5% (or 6% on an adjusted basis). In the release, UPS CEO Carol Tomé says that the “macro environment is very dynamic, but we are on track to achieving our 2022 financial targets by executing our strategy and controlling what we can control.”
So, if everything is on track with current rates, why introduce the highest increase ever? For comparison’s sake, last year’s average rate increase was 5.9%.
In an earnings call, Brie Carere, Executive Vice President and Chief Customer Officer, cited “inflationary pressures on our costs” as the reason for the increased costs. This hike comes on the heels of new remote area surcharges, peak residential pricing, and fuel surcharges.
In short, UPS is raising its rates to keep profits and service levels high…but mostly because they can.
Absolutely! ShipRx helps businesses find ways to lower their rates and receive the refunds they’re owed.
Whether you have just signed a contract negotiated without professional help or you are five years into a contract, we can help. Our team has negotiated contracts for the carriers and helped businesses like yours negotiate their agreements. We will evaluate your current contract for free and will let you know whether there is an opportunity to save money- if your contract looks great, we will tell you. We only get paid when you save money, so we are motivated to help you achieve the best deal possible.
When delivery promises are not met, FedEx and UPS service guarantees mean that customers get refunds. However, these refunds are not always automatic. ShipRx’s proprietary parcel audit software checks over 40 factors on every shipment to give you the refunds you are owed. Most customers see 2 – 3% returns, with some receiving in excess of 5%.
Getting started with parcel contract negotiations and parcel audits is free. Contact us today and start saving before the 6.9% increase goes into effect.
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