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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.

The Reveel App uses AI and machine learning to provide an unparalleled look into what’s impacting your bottom line. Through invoice audits, peer benchmarking, 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.

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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. 

The Reveel App uses AI and machine learning to provide an unparalleled look into what’s impacting your bottom line. Through invoice audits, peer benchmarking, 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.

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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!

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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

The Reveel App uses AI and machine learning to provide an unparalleled look into what’s impacting your bottom line. Through invoice audits, peer benchmarking, 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.

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UPS Announces 5.9% Increase for 2022: Here’s What You Need to Know

UPS announced their general rate increase for 2022 and it’s a hefty average of 5.9%. To no one’s surprise, it matches the same substantial jump FedEx announced earlier this month.

UPS’ average rate increases have gone hand in hand with FedEx’s for many years, which also makes this the biggest jump since 2013. 

Here’s a quick look at the increases:

Residential surcharge

Increasing from $4.45 to $4.85

Additional Handling Rates

2021 price per package2022 price per package
Exceed weight limit$25.50$25.25 – $30.50(by zone)*
Exceed dimension limit$16$15.75 – $20.50(by zone)
Non-standard packaging$15.25$14 – $17.50(by zone)

*Some surcharges now assessed based on zone

Large Package Surcharges

2021 price per package2022price per package
Commercial$105$110 – $140(by zone)*
Residential$130$135 – $165(by zone)

*Some surcharges now assessed based on zone

Expect these rates to go into effect immediately after Christmas, on December 26, 2021.

Small Businesses Bear the Brunt

With labor shortages, supply chain problems and continued COVID-19 related logistical problems, you can almost justify the increase as the cost of doing business in today’s world. But UPS stock earnings continue to climb, and the company isn’t shy about sharing their cost-cutting measures.

“We’re not just avoiding costs, we’re taking costs down,” CFO Brian Newman told MarketWatch.

It’s clear that these bigger price increases are meant to pass any costs onto consumers. Unfortunately, already struggling small businesses are likely to bear the brunt of it.

We’re Here to Help

As always, we’re here to help you learn how to offset the rising costs of shipping. We’ve put the data to work for us. The Reveel Shipping Intelligence® platform and our team can help you lower your shipping costs by as much as 30%.

Deep Dive into the UPS GRI

UPS doesn’t make it easy to decipher their pricing—so we did it for them. Download a free copy of our 2022 UPS General Rate Increase Guide to see:

  • Rate increases for common surcharges
  • UPS pricing trends over the last 10 years
  • How to forecast shipping costs with the new rates

The Reveel App uses AI and machine learning to provide an unparalleled look into what’s impacting your bottom line. Through invoice audits, peer benchmarking, 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.

Sign Up - Free

Shipping Intelligence® in Action with Nisolo

In 2019, we partnered with Nisolo and saved them 22% on their shipping costs through contract negotiations. Last year, we gave them early access to the Reveel’s Shipping Intelligence® Platform.

Besides creating luxury crafted accessories, Nisolo’s mission is to lead the fashion industry toward sustainability and more ethical practices. You can see it in their exceptional design and feel it in their mission to value the producer and the planet as much as the consumer.

To deliver on this vision, Nisolo works hard to minimize overhead. As an eCommerce retailer, it’s a challenge to keep shipping costs low. 

Read on to see how Omari Whyte, Director of Operations at Nisolo, uses the Reveel platform to monitor their shipping spend, take action to lower their costs, and plan for business growth.

Contract Analysis and Agreement Management

Shipping agreements play a significant role in overall shipping costs for eCommerce companies, and Nisolo is no different. Omari and the Nisolo team first reached out to Reveel to help them negotiate with FedEx and UPS and select the carrier with the best overall rates.

Now, with the platform’s Contract Analysis tool, Omari can quickly compare new offers to see if they’re worth further negotiations. Even though they do most of their business with FedEx, UPS reaches out every few months with a proposal to try and win their business.

“It’s usually a shell game,” said Omari. “The carriers will do better in some areas and worse in others that they’re unwilling to budge on.”

Now, Omari has access to quick information and can partner with his Reveel analyst to strategize Nisolo’s next move.

Not only does the platform make it easier for him to see the differences between contracts, but it also makes it easier to impart it to the rest of the management team.

Spotting Minimums

Omari and the Reveel team spent the last round of negotiations focusing on their DIM divisor, and they got it to a pretty good place. By looking at their VitalFactors™ and their Reveel Peer Index™ (RPI), Omari identified their next point of focus: Minimums.

Using the “Minimums” Vital Factor Peer Comparison, Omari saw that their minimums were in the red zone (considered poor), so now he’s working with his Reveel account manager and FedEx to improve it. 

Although this data might have been available to him with his old reports, he wouldn’t have seen the opportunity unless he specifically looked for it. Even then, he wouldn’t have had the peer comparison data to contextualize the number.

“It goes back to the peer index,” said Omari. “I could run that report, but I didn’t have the peer index to say if we’re on track or if we were missing the mark.”

Strategic, Long-Term Planning

Post-pandemic closures, Nisolo is experiencing a high-growth period. Between February and March of 2021, their business has grown 80% month over month.

As you can imagine, an increase in sales for an eCommerce company also increases shipping costs and other operational challenges. Omari can use data from the platform to create project models and create a long-term strategic plan.

One of the KPIs the platform provides is “Average Zone,” which tells you which zone(s) you ship to the most. Zones are relative to where you’re shipping from, and prices go up the farther your items travel. 

For a quickly growing business like Nisolo, shipping zones can significantly influence future planning, especially when expanding production.

Growing out of their current footprint, Nisolo plans to expand their operations using a third-party logistics company. Adding locations presents an opportunity for them to lower their shipping costs—if they use their shipping data to select new locations.

Should they have just one location more centrally located? Do they split operations by coast? The answer to these questions can be informed by the data found in the Reveel platform.

“This information allows us to better think through that decision,” said Omari. Finding the answer to these questions would have taken much longer without it, he said.

Saving Work-hours

So is the platform replacing any tools for our clients? Not really—but that’s because there aren’t any tools that do what the Reveel platform does.

Nisolo had a team member manually pulling historical data every Monday and putting it into a spreadsheet. Only then would Omari get usable information he could interpret and generate insights from.

Now, he can glance at a dashboard to see where to put his attention, get actionable insights harvested using machine learning, and then run detailed reports.

“I’m spending more time acting on the data as opposed to pulling the data,” said Omari.

See What You Can Do with Power of Shipping Intelligence®

This just scratches the surface of what you can do with the Reveel Shipping Intelligence Platform. The more you use the platform to actively manage your shipping contract, the more you can save. 

Learn more about the platform and try it out for free.

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