If you saw our most recent news release recapping some of Reveel’s milestones and accomplishments over the past year, you know we expanded our carrier support beyond UPS and FedEx to include visualization and reporting for UPS Mail Innovations, DHL Express, DHL eCommerce, GLS, Amazon, Jitsu, and Sway – with support for USPS Direct and OnTrac coming soon. This expanded support portfolio reflects one of the important changes we see shaping the carrier landscape.
I am of course speaking of the growing prevalence of multi-carrier strategies, but with an important caveat: In the past, most shippers who embraced a multi-carrier strategy did so to further their own efforts to lower shipping costs, add greater flexibility, and maximize performance by matching the right parcel with the right carrier and service level. Today, the shift to a multi-carrier strategy is in many cases also being driven by the carriers themselves as they take steps to optimize their networks and improve revenue quality.
For years, carriers have made it abundantly clear which parcels they prefer to move in their networks; something that’s most obvious in the aggressive fees typically associated with oversized and overweight packages. What is new is the scope and focus of these efforts. For example, last year, we saw increased network optimization in the application of Delivery Area Surcharges (DAS) to popular, metropolitan zones that bear little resemblance to the rural, difficult-to-reach areas they were created to address.
Today, things are being taken many steps further. Not only are new charges and fees being introduced, but changes are occurring faster as carriers move towards the dynamic pricing strategies they see as an opportunity to increase Revenue Per Package (RPP).
Importantly, these important changes are also increasingly introduced without warning. Gone in many cases are the formal announcements and notifications shippers previously took for granted. This of course is not an entirely new. We occasionally saw increases fly under the radar, for example during the early days of the war in Ukraine when fuel surcharges understandably went into effect to account for higher jet fuel and diesel costs, even as one carrier quietly changed the tables used to calculate them to boost associated revenue by an additional 1.8%. What is changing is that the sheer scale and frequency of such quiet changes, and their impact on shipping costs, is increasing.
The key takeaway is that it has never been more important for shippers to consider if a multi-carrier strategy is right for them, and to be particularly vigilant for any new surcharges, rules and fees that have the potential to significantly impact their costs. Dynamic pricing strategies by their very nature require shippers to be more agile, and to have options. For many businesses, that simple fact alone will require multi-carrier capabilities and the ability to see in an instant when quietly introduced changes in carriers’ policies and procedures impact the bottom line.
