2019 Small Parcel Rates Held Hostage

November 29, 2018


As we write this blog post, the month of November is almost over and Peak Season is well underway, yet we still don’t know the full extent of 2019 changes to small parcel rates from major carriers UPS and FedEx

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A record breaking Thanksgiving weekend has set the tone for what looks be a successful holiday season. In addition, the weekend bodes particularly well for small package providers assuming they can keep their costs in check. However, in just a few short weeks, it’s a new year and we’re still waiting for a mention or announcement from UPS concerning 2019 rates.  For that matter, FedEx, who announced a partial list of 2019 rate increases earlier this month, has yet to post in full. According to their website, the 2019 rate guide will be posted December 17.

In years past, both UPS and FedEx have announced rate changes for the upcoming year, at the latest, by the end of October. So what’s the delay this year? Purely speculation here, but one reason could be the fact that UPS was faced with a tough small package contract negotiation this year culminating in a hand-shake deal this month with the Chicago area Teamsters. Not to mention there were also contract negotiations with UPS Freight which after an initial rejection of the first proposed contract, was finally approved November 10.

In October, the United States Postal Service (USPS) announced their 2019 rate increase. In fact, it was the largest rate increase ever for first class stamps, from 50 cents to 55 cents. But, as noted in a previous blog post, on average, Parcel Select, packages weighing more than one pound, will see increases of at least 9.3% and for those packages that weigh less than one pound will see on average, 12.3% increase.  These rates will impact such USPS customers FedEx and UPS and their SmartPost and SurePost solutions respectively. In mid-November, the Postal Regulatory Commission approved the USPS rate increases which are effective January 27, 2019. This may explain why we have not yet seen 2019 Surepost rate announcements from UPS and a more complete announcement from FedEx. The two companies may be analyzing the USPS rate increases in terms of its impact on SurePost and SmartPost as well as overall small parcel pricing.

Regardless, shippers are left hanging while waiting for the essential Duopoly to announce all their 2019 small parcel rates. Unable to plan and budget small parcel costs, many shippers are at a standstill. What has traditionally been common practice of giving at least a 30 day notice is not necessarily a requirement based on our research. In other words, FedEx and UPS are not legally obligated to provide any notice of rate changes whatsoever unless it is noted in specific shippers’ contracts.  Let’s hope as a courtesy at least, that FedEx and UPS are communicating with their customers regarding 2019 rates. Based on communications with our customers, they aren’t, and it’s a very troubling situation. There are a growing number of options for last mile delivery. To find out more, contact us.

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2019 Small Parcel Rates Held Hostage

November 29, 2018


As we write this blog post, the month of November is almost over and Peak Season is well underway, yet we still don’t know the full extent of 2019 changes to small parcel rates from major carriers UPS and FedEx . A record breaking Thanksgiving weekend has set the tone for what looks be a successful holiday season. In addition, the weekend bodes particularly well for small package providers assuming they can keep their costs in check. However, in just a few short weeks, it’s a new year and we’re still waiting for a mention or announcement from UPS concerning 2019 rates.  For that matter, FedEx, who announced a partial list of 2019 rate increases earlier this month, has yet to post in full. According to their website, the 2019 rate guide will be posted December 17. In years past, both UPS and FedEx have announced rate changes for the upcoming year, at the latest, by the end of October. So what’s the delay this year? Purely speculation here, but one reason could be the fact that UPS was faced with a tough small package contract negotiation this year culminating in a hand-shake deal this month with the Chicago area Teamsters. Not to mention there were also contract negotiations with UPS Freight which after an initial rejection of the first proposed contract, was finally approved November 10. In October, the United States Postal Service (USPS) announced their 2019 rate increase. In fact, it was the largest rate increase ever for first class stamps, from 50 cents to 55 cents. But, as noted in a previous blog post, on average, Parcel Select, packages weighing more than one pound, will see increases of at least 9.3% and for those packages that weigh less than one pound will see on average, 12.3% increase.  These rates will impact such USPS customers FedEx and UPS and their SmartPost and SurePost solutions respectively. In mid-November, the Postal Regulatory Commission approved the USPS rate increases which are effective January 27, 2019. This may explain why we have not yet seen 2019 Surepost rate announcements from UPS and a more complete announcement from FedEx. The two companies may be analyzing the USPS rate increases in terms of its impact on SurePost and SmartPost as well as overall small parcel pricing. Regardless, shippers are left hanging while waiting for the essential Duopoly to announce all their 2019 small parcel rates. Unable to plan and budget small parcel costs, many shippers are at a standstill. What has traditionally been common practice of giving at least a 30 day notice is not necessarily a requirement based on our research. In other words, FedEx and UPS are not legally obligated to provide any notice of rate changes whatsoever unless it is noted in specific shippers’ contracts.  Let’s hope as a courtesy at least, that FedEx and UPS are communicating with their customers regarding 2019 rates. Based on communications with our customers, they aren’t, and it’s a very troubling situation. There are a growing number of options for last mile delivery. To find out more, contact us.

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