The Five-Year View: Cost to Ship with UPS and FedEx has Risen Over 28 Percent
Spend Matters welcomes another guest post from Jim Haller of NPI, a spend management consultancy focused on eliminating overspending on IT, telecom, and shipping.
Historically, UPS and FedEx have raised their ground and air shipping rates year over year – and rates for 2014 will be no exception. Despite lower fuel costs and economic conditions that are slightly improving, both carriers have once again raised prices across the board.
As in years past, the increases are remarkably similar with UPS and FedEx both announcing a 4.9% price increase for ground shipments. For air shipments, UPS announced a 4.9% increase while FedEx’s rates will rise by 3.9%. Yet, unlike previous years, the carriers have not offset these increases with reductions in fuel costs.
These rate hikes may seem modest, especially when compared to last year’s announcement (5.9% to 6.5%). But, the reality is shippers are paying 28% to 32% more for shipping than they did just five years ago.
Surcharges and accessorial fees have also increased, as detailed in the table below. Note the 33% increase in FedEx’s delivery confirmation fee.
As I’ve mentioned before, now is the time for shippers to ask themselves how they can negate or minimize the impact of these cost increases – waiting until Q1 2014 expenses are tallied is a costly alternative!
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