Our Shipping Intelligence® platform analyzes thousands of shipping agreements, models them, and runs them through simulations to give our customers data driven analysis. Now that FedEx and UPS rate increases are in effect for 2022, our data scientists took a deep dive into the impact shippers should expect to see and the results are not what you would expect. Let’s take a look at how these rate increases will impact your business.
Additional Surcharges That Affect Shipping Spend
Only 3% of shippers will see 5.9% or less, everyone else will see higher increases with the most impacted shippers being those that use FedEx Ground Economy (formerly SmartPost). These are widely direct-to-consumer shippers that opt for the cheapest shipping method possible. If that’s you, expect an average rate increase of a whopping 26%.
FedEx Biggest Service Impact
- Ground Economy shippers (formerly SmartPost)
- Avg 26% increase
- Heavy surcharge shippers
- Additional Handling and Oversize surcharges changed to a zone-based charge
Businesses Likely Hit the Hardest
- B2C shippers
- Furniture/home goods providers
- Sporting goods
- Auto parts
UPS Biggest Service Impact
- Heavy surcharge shippers
- Larger package shippers
Businesses Likely Hit the Hardest
- B2C shippers
- Furniture/home goods providers
- Sporting goods
- Auto parts
Additional Charges To Look Out For
FedEx
• Several surcharges, like additional handling and oversize packages, will begin segmenting rates by zone.
- A new fuel surcharge went into effect on November 1, 2021.
- 2021’s peak surcharges will be assessed at two points in the holiday season.
UPS
• Several surcharges, like additional handling and large packages, will begin segmenting rates by zone.
• A new surcharge called the US48 Remote Area Surcharge will apply to parcels shipped to remote areas.
In short, an astounding 97% of companies in the analysis will see a higher than a 5.9% increase to their shipping spend in 2022. The real increase averages look more like 12.86% for FedEx and 10.25% for UPS once you factor in this year’s surcharges, minimums, and zone segmented charges.
It’s Time to Prepare For These Increases
Now that FedEx and UPS have enacted their rate increases, Reveel is offering a 14 day free trial of our new Impact Analysis tool so you can model the rate increase using your own unique shipping data to get an accurate view of shipping costs for the year ahead.
Become an Essential user today and talk to us about how to protect your bottom line in 2022.
The Reveel App uses AI and machine learning to provide an unparalleled look into what’s impacting your bottom line. Through invoice audits, AI and Machine Learning technology, and rate modeling/simulations, you can see the health of your operation and assess pricing changes from parcel carriers like FedEx and UPS. Sign up for a free Reveel account today to see how you can leverage automation to synthesize your data, ship more for less, and reduce the time needed to identify issues and action items.
