22 Aug
Don’t Throw Away Money on These Freight Trends

If you think parcel shipment companies like UPS and FedEx have you and/or your company’s best interests at heart, think again.

Regardless of how much your shipping — from one parcel to 1,000 pallets — carrier companies are charging ever more to get your goods from point A to point B. This trend doesn’t look to be changing, or even slowing down, anytime soon.

While UPS and FedEx have been blazing this unfortunate trail, other large shipment companies have been quietly following in their footsteps. Some such carrier companies specialize in B2B shipments, so don’t think your company is an exception to the price-increase rule.

Keep in mind that there are things we at Prestige can do to combat and offset these price increases. As a third party logistics firm (3PL), we have the bargaining power consumers and even large, individual companies do not. No company outside the logistics industry, no matter how powerful or wealthy, can compare to the volume of goods we broker shipment for. Therefore, no single company can compete with the shipping costs we can get your business.

Without further ado, here is a smattering of the specifics and freight trends of cost increases in the carrier industry in the past 5 years.

1. UPS’s parcel shipment rates have gone up 60% in the last 10 years.

2. UPS’s operating profit growth for its US division outperformed the US economy by 7.55% last year, making the relative price increases of shipping even more impactful than a straight dollar amount.

3. When measuring a package for shipment, UPS and FedEx do so two ways. They weigh (mass) and laser scan (dimensions, cubic feet) the packages and charge customers the higher of the two.

4. Based on this change, 90% of customers have noticed an increase in shipping prices. Of that 90%, nearly half have noticed an inflated price of 10%+.

5. Price-ceiling boxes are a thing of the past with dimensional laser scanners at work. Cramming an object into a box that creates a bulge will be upcharged, as the laser will take the protruding into account.

6. Carriers have long had “additional handling fees” for parcels that exceed a certain dimension at its longest point. Up until last year, that length was 48” for a price of $9.00. Summer 2016 saw an increase in charge to $10.40. Now, the maximum length before a penalty is incurred is 36 inches. This is down 25% from last year’s 48 inches. UPS and FedEx have hiked their prices up 8 and 7 times, respectively, in the last 18 months, and are likely to continue this uptick trend into the future.

As previously mentioned, these freight trends are not limited to B2C or C2C small parcel shipment companies. Corporate shippers are following suit, which means your company’s bottom line is taking a hit. But it doesn’t have to be that way. Stand up against bullying in the shipping industry, and contact a 3PL like Prestige today for a free, custom consultation. We’ll work with your company’s specific products and challenges to recommend ways to reduce your shipping expenditure and provide you a cost quote that is sure to significantly undercut the other guys.