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.
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
Businesses Likely Hit the Hardest
UPS Biggest Service Impact
Businesses Likely Hit the Hardest
• Several surcharges, like additional handling and oversize packages, will begin segmenting rates by zone.
• 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.
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.
FedEx’s new 2022 rates go into effect next Monday, January 3, and as Reveel’s CEO Josh Dunham noted in an Bloomberg article published on Black Friday, shippers “must contend with double-digit increases for parcel service, including special surcharges, even after they endured price jumps of almost 10% last year.”
Both FedEx and UPS announced a 5.9% general rate increase for 2022, but to put those increases in context and find out how much shippers’ costs will really be impacted, Reveel’s data scientists created a model that applied the rate increases and importantly the new surcharges, fees and terms both carriers introduced but do not include on their rate cards. Then they ran the model against shipments Reveel’s customers made in 2021 and compared the totals.
What they found in the resulting year-over-year comparison is that most businesses will see a significantly higher increase than the 5.9% announced by FedEx and UPS. Some of our data scientists’ most noteworthy findings include:
That’s why it’s never been more important to negotiate your 2022 shipping contracts. It’s not too late to take action. If you haven’t renegotiated, now is the time to do so! Following are three steps you can take to get started:
2021 presented logistical challenges for businesses across the board. Rising inflation, shipping delays, and labor shortages are just a start to the laundry list of problems that created the perfect storm for an unpredictable shipping environment. And amongst the chaos, FedEx continues to pass on these challenges to their customers to pad their bottom line. But don’t worry, we are here to help. Let’s take a look at what is in store for 2022.
On January 3rd, 2022, FedEx will enact a general rate increase, or GRI, of 5.9% on all ground and air services. However, our data scientists have reviewed these changes, and found that shippers should expect to see much higher increases depending on the surcharges and minimums that FedEx is trying to sweep under the rug. To see how your business will be affected by these rate increases, download our Fedex Rate Change Guide to get informed.
In 2021 and 2022 forecasts, FedEx is servicing unprecedented levels of business. For the customer, this highlights a shift in the power dynamic, given FedEx is less concerned about customer retention. This enables carriers to raise rates and add fees at will. The table below gives a preview into FedEx’s general rate increases over the last 10 years.
|Year||FedEx Air||FedEx Ground|
On top of the 5.9% rate increase, there are a few unique changes to note this year. Here are some highlights:
So what does this information suggest?
There’s no getting around it—it’s a near guarantee that your business will be affected by these rate increases. While it’s unfortunate that FedEx continues to prioritize profits above all else, there’s something you can do about it.
Don’t be caught off guard. Tap into Reveel’s Shipping Intelligence® platform to:
Now that FedEx has published their base rates, Reveel is offering a free impact analysis using our Shipping Intelligence Platform and your unique shipping profile. Be sure to sign up for our Essential Edition (free) now and be ready to see what impact the General Rate Increases will have on your shipping expense when the increases go into effect on December 26, 2021.
With FedEx and UPS seeing greater demand for parcel shipment volumes than ever before there’s no question it’s a difficult negotiation climate; however carriers are making agreements. Now is the time for all shippers to negotiate their 2022 contracts. It’s never been more important to be informed and prepared in order to secure the best rates and terms.
With Fedex and UPS General Rate Increases right around the corner, Reveel’s Co-Founder and CEO, Josh Dunham, wrote an amazing article for Parcel Magazine that outlines the top strategies for a successful contract negotiation with your carriers. The piece takes into account the current market conditions influencing negotiations and how you can equip yourself, and your business, with the necessary information to negotiate your contracts with confidence in the ever changing world of shipping. Josh covers these critical topics:
· It’s crucial to negotiate more than ever
· Understand the carriers’ mindset going into 2022
· Know what is negotiable and what is not
· Audit your invoices
· Know your shipping profile
· Follow the money in your negotiation
· Negotiate surcharges aggressively for 2022
· Explore flat rate shipping options and negotiate capacity guarantees
To get the full spread, head over to page 16 in Parcel Magazine’s November-December issue to get informed.
This year, FedEx and UPS have levied unprecedented increases. Small businesses have borne the brunt of the pandemic, and carriers seem determined to further that trend. The last two years have signaled a massive shift to online shopping (that shows no signs of slowing), and the carriers are able to leverage their duopoly combined with the market demand to drive up shipping costs.
Among the traditional rate increases, there are often a few additional charges and changes to the carrier pricing.
Here are some highlights:
GRI pricing for UPS will go into effect on December 26, 2021, while FedEx’s new pricing will launch on January 3, 2022. With these price increases right around the corner, it is imperative that you prepare your business for higher shipping costs.
At Reveel, we empower customers with the information they need to negotiate or renegotiate carrier contracts from a position of strength. This year we launched the Reveel Shipping Intelligence® Platform to help you do it.
Keeping with our mission to reveel the unknown, we’ve built a platform with a series of data-fueled tools to help you navigate the shipping industry. More than clarity, we’ve given you easy to use access to insights harvested from millions of data points to ensure you get the best rate every time.
Undoubtedly, you’ve already seen that both FedEx and UPS have announced a 5.9% General Rate Increase for 2022. This is just an average and doesn’t include surcharges. Our data scientists have run an analysis across all of our clients and the real increase is much higher than 5.9%
FedEx real average increase 12.86%
UPS real average increase 10.25%
Obviously, this isn’t the best news, but the good news is that Reveel has just launched a GRI Impact analysis tool in our Shipping Intelligence Platform. We are offering a no obligation 14 day free trial of the Impact Analysis tool so you can see exactly what the increase will be for your unique business in order to confidently plan for 2022.
With these new increases, we highly recommend taking another look at your contracts and leveraging our Shipping Intelligence platform to see how to lower your shipping costs.
UPS and FedEx are notorious for making their rate changes impossibly difficult to decipher, so we took the liberty of simplifying it for them with a comprehensive guide that breaks down these price increases from every angle. Download your free copy of our FedEx and UPS Rate Change Guide to see:
Assuming you’ve already seen the substantial General Rate Increase FedEx announced for 2022, you’re probably wondering how this will affect your shipping budget.
In addition to the numerous COVID-19 related surcharges FedEx enacted in the last two years, the carrier will also increase rates by a whopping 5.9%.
Be on the lookout for new surcharges and an increased fee structure for existing surcharges. For example, a fuel surcharge will go into effect on November 1, 2021, with variable rates depending on market fuel prices.
Next year, FedEx is also changing how they assess some of their fees. They’re introducing zone-based pricing for some surcharges, such as additional handling and oversize package fees. This means some packages could actually see a decrease, while others go up as much as 30%.
With FedEx’s rate guides notoriously difficult to decipher, we’ve compiled the increases into an easy-to-use guide.
Download the guide to see:
Spoiler Alert: Once FedEx and UPS have both published their base rates, Reveel will be offering a free impact analysis using our Shipping Intelligence Platform and your unique shipping profile. Be sure to sign up for our Essential Edition (free) now and be ready to see what impact the General Rate Increases will have on your shipping expense.