We had a great time in Philly last week at the 2023 Home Delivery World conference, where we caught up with old friends and made new ones among the industry leaders, clients and partners in attendance. It was a great opportunity to share how we are helping retailers thrive even as parcel shipping costs continue to increase in the face of carriers’ record-breaking rate increases.
It was a jam-packed 2 days of thought-provoking sessions and endless opportunities to share ideas and insights on how groundbreaking solutions in data science and automation, as well as established best practices and new delivery services, are helping grocers, retailers, manufacturers, and warehouse operators thrive in the final mile. But it was also clear that the ongoing increase in parcel shipping costs can no longer be ignored in light of their impact on profitability.
Here are a few key takeaways we heard, witnessed and discussed with attendees. The consensus is that something has to change.
- Parcel shipping rates are out of hand, especially with the major carriers, and companies are bracing themselves for the release of the 2024 rate cards after back-to-back, recording-breaking general rate increases (GRIs) from FedEx and UPS in 2022 (5.9%) and 2023 (6.9%);
- Retailers lack, yet desire, visibility into spend and where exactly they can lower costs, particularly in areas like parcel shipping that were historically difficult to manage because of their complexity;
- Retailers are craving – and demanding – more visibility across their entire supply chain not only to save money, but to drive top-line results;
- Shippers are tired of perpetually paying consultants to save money, only to see their consulting fees increase again and again – a reality that has led to significant gain share fatigue and demand for another option; and
- Shippers want to build more resiliency into their operations so they have more control and are less impacted by any single carrier, even as they question how their costs will be impacted as we approach another peak holiday shopping season this fall.
The bad news? Based on our shipping data, we’re forecasting another significant jump in GRI for 2024. We also expect to see more fine-print details and hidden costs in carriers’ contracts that are designed to increase revenue-per-package.
The good news? Shippers don’t have to accept these increases sitting down. Reveel is here to help, so if you missed us at the conference, or want to talk with a member of our team, let us know!