2009 UPS and FedEx Rates Special Report
F. Curtis Barry & Company’s 2009 UPS and FedEx Rate Special Report highlights some of the rate increases that will effect your shipping and business in 53 days. The question to ask yourself when reading this Special Report is, “have I done everything that I can to prepare my company for these rate increases?”
Overall Rate Increase Summary
UPS and FedEx have both announced that their rate increase will be 6.9% for both Air and International shipping. There is an offset on this increase due to the standard 2 % decrease with the fuel surcharge index. This fuel surcharge reduction will barely be felt due to the fact that the base fuel is increased 16%.
UPS has announced that UPS Ground service rates will be increased 5.9% come January 5th. FedEx has not announced their rate increase at this time, but history shows that it will mirror the 5.9% UPS Ground service rate increase.
UPS Ground Rates
UPS has announced that their Ground service rates will increase by a record 5.9%. This is 1% higher that last year’s increase. The real sting to these rate increases that no one has mentioned is that the Base Rate for a 1 Pound package for Zone 2 (used to establish the minimum charge for contracts) has been increased over 8.8%. In 2008 it was $4.20 and 2009 will be $4.57. A few other 2009 Ground service changes are:
* The Residential Surcharge will increase $0.10 (5.1%) to $2.05
* 19,252 Rural and Super Rural zip codes will have a new premium charge added. This means that the charge for an ‘Extended’ DAS Residential package will increase $0.35 (15.2%) to $2.65.
UPS Air and International Rates
UPS has announced a 6.9% rate increase in the Air and International shipping rates. If adding in the 2% reduction in the air fuel surcharge, the increase is 4.9%. As if this isn’t hard to fathom already - Next Day Air rates are increasing 7.78%, Letter rates by 7.74%, Next Day Air Saver by 8.44% and Second Day Air is increasing by 7.36% as well. A few other 2009 Air and International service changes are:
* The Residential Surcharge will increase $0.10 (4.4%) to $2.40.
* 19,252 Rural and Super Rural zip codes will have a new premium charge added. This means that the charge for an ‘Extended’ DAS Residential package will increase $0.35 (15.2%) to $2.65. Commercial will increase 6.7% to $1.60.
FedEx Ground, Air and International Rates
As stated earlier, FedEx Ground rates have not been officially announced, but history tells us that they will mirror the UPS Ground service rate increases, which for 2009 will be 5.9%. FedEx has announced a 6.9% rate increase in the Air and International shipping rates. If adding in the 2% reduction in the air fuel surcharge, the increase is 4.9%. Just as UPS has done, there are a few “smoke and mirror tricks” in FedEx’s Standard Overnight rates being increased by 8.44%. Look closely and you will see that all Zone 4-8 shipments will be increased by 9.29% and Zones 2-3 are increasing 6.3%. Priority Overnight is increasing by 7.78% and Express Saver is increasing by a modest 4.59%. A few other 2009 Air and International service changes are:
* The Air Residential Surcharge will increase 4.4% to $2.40.
* Commercial Delivery Area Surcharge will increase from $1.50 to $1.60 (6.7%)
* Residential Delivery Area Surcharge will increase 4.4% to $2.40.
A Few Additional Changes in Accessorial Charges
Overall there are 90+ Accessorial Charges that can be applied to your UPS and FedEx carrier contracts. That is where most of the carrier contracts get extremely confusing. For example, for 2009:
* UPS Commercial Area Surcharge Delivery - $0.10 to $1.60
* UPS Residential Area Surcharge Delivery - $0.10 to $2.40
* UPS Extended Rural and Super Rural Residential Delivery - $0.35 to $2.65
* UPS Residential Delivery Charge - $0.10 to $2.40 for Air and $2.05 for Ground
* UPS Saturday P/U & Delivery - $2.50 to $15.00
* UPS Additional Handling - $1.00 to $7.50
* UPS Address Correction for Ground - $2.00 to $8.00
* UPS NDA Early AM - $2.50 to $31.00
* UPS Hazardous Materials Air/Ground - $2.50 to $32.50/$22.50
* FedEx Commercial Area Surcharge Delivery - $0.10 to $1.60
* FedEx Residential Area Surcharge Delivery - $0.10 to $2.40
* FedEx Residential Delivery - $0.10 to $2.40
* FedEx Saturday P/U & Delivery - $2.50 to $15.00
How Do I Prepare My Company
It is important to understand that these rate increases are averages and that these rate increases can not be applied across the board for all services, weights and zones. The fastest and most thorough way to understand and potentially reduce the effects of these rate increases is to have your shipping history and current contract analyzed. This will allow you to find out if you can save money IMMEDIATELY by renegotiating your contract with your carrier.
F. Curtis Barry & Company is encouraging EVERYONE to act quickly and use our FREE carrier contract and rate analysis. Contact Jeff Barry via email or call 804-740-8743 if you are interested in saving money on your shipping costs.
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F. Curtis Barry & Co. works with multichannel businesses to increase catalog profitability through the evaluation and implementation of order management systems, inventory management systems, warehouse management systems that match client objectives.
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