By Ken Wood, President of LJM Consultants – Freight Auditing & Consulting
Ken Wood (photo) is a nationally renowned expert on parcel rate negotiation and invoice auditing. Wood is the owner of LJM Consultants, which, assists clients with negotiating their UPS/FedEx agreements. LJM Consultants was recently named the “best parcel auditing company in America” and was also inducted into Inc. Magazine’s Top 500/5000 fastest growing companies in America for 2013.
UPS recently announced their complete 2014 rate increase of 4.9%. This increase will take effect on December 30th, 2013. FedEx announced their Air/Express average increase of 3.9% on September 18th, 2013 . The FedEx increase will take effect on January 6th, 2014. FedEx will announce their ground increase shortly; it will likely be very close to UPS’ percentage. The operative word in both carriers’ announcements is “average”. Like in past years, this year’s increase will affect lighter weight shipments much more significantly than heavier weight shipments. When the carriers mention an average increase, they arrive at the “average” by rating every package from 1 lb. to 150 lbs. shipped to every cell or zone. Ex: a 3lb ground shipment going to zone 7 will increase by 7.84% while a 130 lb. ground shipment going to zone 5 will increase by 2.61%. The truth is that the majority of packages being shipped by small parcel shippers weigh 30 lbs. or less. As a result, many companies will see their overall parcel shipping costs rise by more than the announced average increase. Click the following to see a complete analysis of 2014 vs 2013 rates.
The increase that will likely impact the majority of shippers the greatest though, is the increase to the minimum net charge. The ground minimum net charge is the cost of a 1lb shipment to zone 2. The 2014 Ground Minimum Charge increased by $.40 cents from $5.84 to $6.24, an increase of over 6.8%.
Also, the 3.9% and 4.9% increases mentioned by the carriers do not include Accessorial charges (surcharges). Below are carrier links directing you to the increased accessorial fees for 2014.
UPS Accessorial Fee Increase: http://rates.ups.com/surcharges.html
FedEx Air Accessorial Fee Increase: http://www.fedex.com/us/2014rates/surcharges-and-fees.html
For more detailed information on the parcel rate increases and what you can do to offset them, visit: http://www.myljm.com/.