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FedEx & UPS Rates Have Gone Up: Here is the Impact We are Seeing

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.

It’s Not Too Late to Negotiate – FedEx’s New Rates Go Into Effect Next Monday

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:

  • Less than 3% of shippers will see an increase at or below the 5.9% general rate increases both FedEx and UPS announced for 2022;
  • The actual impact of UPS’s 2022 fees and terms will be a 10.25% increase for most companies;
  • The actual impact of FedEx’s 2022 fees and terms will be a 12.86% increase for most companies; and
  • The impact for some customers and sectors will be far higher – for example, businesses that use FedEx Ground Economy, formerly SmartPost, will see an average increase of 26%!

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:

  • Check out the article by Reveel’s co-founder and CEO Josh Dunham in the current issue of PARCEL Magazine on page 16. “How to Negotiate Your Contracts in 2022 and Beyond” is a five-minute read that provides a valuable overview of proven strategies that will help you save money on shipping in the coming year;
  • Sign up for a free Reveel Impact Analysis to learn how the 2022 rates and terms from FedEx and UPS will impact your business by visiting https://go.reveelgroup.com/impact-analysis/; and
  • Contact us at contact us to speak with an expert who can help you put Reveel’s Shipping Intelligence to work for your company.

What Is FedEx GRI?

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.

FedEx Rate Increase 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.

Historical FedEx Rate Increases

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.

YearFedEx AirFedEx Ground
20225.9%5.9%
20214.9%4.9%
20204.9%4.9%
20194.9%4.9%
20184.9%4.9%
20173.9%4.9%
20164.9%4.9%
20154.9%4.9%
20143.9%4.9%
20135.9%5.9%
20125.9%5.9%
FedEx Historical Rate Increases

What’s New in 2022

On top of the 5.9% rate increase, there are a few unique changes to note this year. Here are some highlights:

  • Several surcharges, like additional handling and oversize packages, will begin segmenting rates by zone.
  • A new fuel surcharge will go into effect on November 1, 2021.
  • 2021’s peak surcharges will be assessed at two points in the holiday season.

So what does this information suggest?

It’s Time to Prepare For Rising Fees

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:

  • Forecast how these changes will affect your shipping costs
  • Audit your invoices to recoup any and all refunds
  • Identify the fees you should negotiate to make the biggest impact on your bottom line

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.

Sign up for the FREE version of the Shipping Intelligence platform today.

How To Negotiate Your Shipping Contracts in 2022

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. 

What is UPS GRI?

It is right to assume that current market conditions are driving up the cost of shipping, but rate increases are nothing new to the world of shipping. In fact, UPS implements a general rate increase, or GRI, year over year. Let’s take a look at what this entails.

The General Rate Increase for 2022

On October 28, 2021 UPS announced a 5.9% General Rate Increase on UPS Ground, UPS Air, and international services that will go into effect December 26, 2021. On top of the announced 5.9% increase, shippers should also be aware of the additional surcharges that are baked into the cake. Reveel’s data scientists did the number crunching and found that some industries could see substantially higher increases. 

For an in-depth impact analysis of these rate increases and surcharges, be sure to check out our 2022 UPS Rate Increase Guide to get informed.

Historical UPS Rate Increases

As mentioned, these rate increases are common practice for the large carriers and the increase of 5.9% on UPS Ground is the highest increase we have seen since 2013. The table below outlines the historical data on UPS rate increases over the last 10 years.

YearUPS AirUPS Ground
20225.9%5.9%
20214.9%4.9%
20204.9%4.9%
20194.9%4.9%
20184.9%4.9%
20174.9%4.9%
20165.2%4.9%
20154.9%4.9%
20144.9%4.9%
20136.5%5.9%
20126.9%5.9%
UPS Historical Increases

So now the question arises—what can you do to prepare for these annual increases?

Get Smart With Reveel’s Shipping Intelligence

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 UPS 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:

  • Forecast how these changes will affect your shipping costs
  • Audit your invoices to recoup any and all refunds
  • Identify the fees you should negotiate to make the biggest impact on your bottom line

Now that FedEx and UPS have both 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.

Sign up for the FREE version of the Shipping Intelligence platform today!

FedEx and UPS Rate Increases Are Right Around the Corner: Here’s How You Can Prepare

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:

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.

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.

Don’t Worry, We Can Help

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.

A Closer Look At These Rate Changes

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:

  • Data driven Impact Analysis
  • Rate increases for common surcharges
  • FedEx & UPS pricing trends over the last 10 years
  • Background on why shipping rates tend to inflate over time
  • How to forecast shipping costs with the new rates

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