FedEx, UPS & USPS Shippers: 3 Steps to Help Conquer The Annual GRI Blues

If you run an eCommerce business, you know that General Rate Increases (GRI) among major carriers are an annual reality. Don’t let GRIs get you down. This year, take advantage of them don’t get taken by them. Here’s how:

STEP 1: Understand which rates are increasing 

USPS GRIs effective January 27, 2019

• Priority Mail Express increased by 3.9%
• Priority Mail increased 5.9%
• Mailing Services product prices increased 2.5%
• First-Class Package Service moved to zone-based pricing
• First-Class Mail Forever stamps increased from $.50 to $.55

USPS’ dimensional weight (DIM) pricing increased substantially. In the past, the Postal Service only used DIM pricing for zones 5-9 Priority Mail. In Q2, 2019, expect USPS to implement DIM pricing for all Priority Mail, Priority Mail Express and Parcel Select packages that are larger than one cubic foot. Furthermore, the DIM will be reduced from 194 to 166, a small change that can have a big impact on parcel shipping costs.  

Did you know?  Entering DIMs in StarShip will ensure accurate rates and possible discounts through the StarShip / Visible Supply Chain partnership.

FedEx GRIs effective January 7, 2019

• FedEx Express and FedEx Ground increased by an average of 4.9%
• FedEx Freight increased by an average of 5.9%
• Look out for changes to FedEx surcharges and minimums
• FedEx Express and Ground minimum increase ranged from 3.5% to 5.4%

Remember, these increases were implemented across the board. While FedEx Express and Ground report that “on average” rates went up 4.9%, some categories experienced hikes as high as 8.2%! For example, Surcharges and Fees increased in most cases upwards of 5%, and the print return a label pricing is doubling!

UPS GRIs effective December 26, 2018

• The rates for UPS Ground, Air and International services increased an average of 4.9%
• Fuel surcharges now apply to Additional Handling, Over Maximum Limits, Signature required and Adult Signature Required accessorial charges
• A $2.00 processing fee per package in now charged when Package Level Detail (PLD) is not provided to UPS prior to delivery
• The rates for certain value-added services and other charges increased

Be aware of how you send your packages and take action if necessary to soften the blow of these annual increases.

STEP 2: Optimize your shipping strategy

• Pay Attention to DIM changes: The latest dimensional divisor reductions demand that shippers approach package dimensions and weight with even more scrutiny. In many cases, shifting to an even slightly smaller box with less padding can make a big difference.

• Zone shipping: The farther you ship, the more expensive it gets. To minimize the impact of excess shipping costs, never ship over a Zone 5. To accomplish that, you may need distribution centers on each coast. 

• Multi-carrier strategy: Major carriers’ pricing tends to encourage certain consumer behaviors while penalizing others by way of excessive rate hikes. In freight brokerage, typically the best way to get the best rate for any small-to-medium-sized business is to rely on one freight provider. If you are shipping a variety of package sizes and weights, use a multi-carrier strategy to ensure you are taking advantage of the best rates and know that StarShip can help with rate shopping & service selection rules!

Step 3: Consider working with a shipping expert

• Understanding annual GRIs is a complicated affair. Since you likely have 1,001 tasks that need your immediate attention, why not partner with a shipping expert who can get to work on optimizing your parcel shipping strategy?

Cross one thing off that long to-do list and get back to work finding solutions to the remaining 1,000 outstanding items that nobody can do better than you.

GRIs, DIMs, Oh my!

Small rate increases can still significantly impact your annual shipping costs. Resolve to use these price hikes to your advantage. If you don’t already have a solid shipping strategy in place or don’t know where to begin, V-Technologies and Visible Supply Chain Management can help! If only sticking to all of your New Year’s resolutions were this easy.

Thank you!

Big thank you to our guest blogger, Visible Supply Chain Management.  They were kind enough to share their knowledge (25+ years worth!) and provide insight on the 2019 GRIs.  

Call us today:

800-462-4016  or email: sales@vtechnologies.com

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