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FedEx Freight Drops Customers in Capacity Crunch

Customers were apparently provided only short notice – one business day – of the FedEx suspension and must now act quickly to find replacement carriers, many of whom are experiencing similar capacity crunches.

About 1,400 less-than-truckload (LTL) FedEx Freight customers are now in need of a new freight carrier as FedEx Freight recently announced it would be cutting off their service as it attempts to rectify delays caused by an overwhelming amount of tonnage spurred by the COVID-19 pandemic and recovery.

In a statement to FreightWaves, FedEx spokesperson Jim Masilak explained the situation:

“FedEx continues to keep commerce moving and deliver critical shipments during the COVID-19 pandemic. The impact of the virus has generated elevated volumes, and we continue to experience high demand for capacity and increased operating costs across our network. As a result… FedEx Freight will begin implementing certain volume control actions to help balance capacity with demand.”

Customers were apparently provided only short notice – one business day – of the suspension and must now act quickly to find replacement carriers, many of whom are experiencing similar capacity crunches.

Trickle Down from FedEx Capacity Crunch Expected

An unnamed executive speaking on those affected by the FedEx Freight announcement told FreightWaves:

“It’s mass panic because there’s no available capacity to service them to begin with.”

As major carriers experience capacity crunches, those pushed to smaller carriers will certainly take up remaining capacity and likely bump the next set of customers from their rosters creating trickle down capacity crunches.

Avoid the Mad Dash with a More Diverse Transportation Network

Persistent delivery capacity shortages spurred by ballooning e-commerce volumes put many businesses at risk as trusted carriers increasingly prioritize capacity for their largest customers. Companies that invest in a cloud multi-carrier shipping system to create flexibility and diversity in fulfillment can better withstand potential carrier cuts by quickly turning to other carriers to ensure their deliveries reach their intended destinations in a timely fashion, avoiding the mad dash to source and secure capacity with another carrier with whom there’s no contract or relationship in place.

Who Can Pick Up the Slack?

The capacity crunch creates an LTL ecosystem that’s ripe for disruption as carriers struggle to handle the volume of shipments spurred by the pandemic and recovery. Perhaps LTL shippers will opt to change their model and employ a parcel approach. Maybe regional carriers will enter the mix and create more LTL flexibility in both number of carriers as well as service levels.

Whatever the result, the FedEx Freight announcement is likely just the tip of the iceberg and a sign of things to come. When shippers are tied to just one or two carriers, they’re beholden to the whims of the carrier facing a capacity crunch. Having access to more and different types of carriers and services can help minimize the impact of unexpected customer reductions and delays.

Contact us today to learn how Logistyx’s multi-carrier shipping software can help your business manage a wide range of shipping scenarios and optimize parcel shipping to help control costs.

FedEx and UPS Increase Surcharges Again as Pandemic Continues to Impact Shipping

The significant growth of online shopping propelled by the outbreak of the COVID-19 pandemic doesn’t seem to be letting up. While some aspects of life have returned to pre-pandemic levels, the impact of the virus continues to put a strain on shipping, generating elevated volumes, high demand for capacity, and increased operating costs for carriers. As such, both FedEx and UPS have announced additional peak surcharges due to the pandemic’s continued disruption of the shipping industry.

Effective June 21, 2021, FedEx will implement percentage increases to three delivery surcharges, including an additional handling surcharge, a residential delivery surcharge, and a peak surcharge on Ground Economy.

Recently started on May 23, the UPS surcharge increase now applies to certain international shipments originating from Asia, including Hong Kong, China, Taiwan, Korea, Vietnam, Malaysia, Thailand, Indonesia, Singapore, Australia, and New Zealand to the U.S. UPS increased prices for UPS Worldwide Express Plus, UPS Worldwide Saver, UPS Worldwide Expedited, and UPS Worldwide Express Freight, from these countries.

The changes from both carriers were classified as “peak” surcharges, which, as Modern Shipper notes, “underscores that in the unprecedented environment for package deliveries during the post-COVID-19 era, peak season is no longer associated with the Christmastime holidays but has become a year-round phenomenon. The sellers’ market for parcel-delivery services has never been hotter than it is today, and all carriers have as much traffic as they can handle.”

Control Costs with a More Diverse Transportation Network

For shippers looking to find a workaround, diversifying transportation networks serves as a valuable tactic to combat the peak surcharges. The persistent delivery capacity shortage and unrelenting e-commerce volumes continue to raise the stakes for many businesses. Companies that can invest in a cloud multi-carrier parcel shipping system that creates flexibility and diversity in fulfillment stand a better chance of keeping costs in check. To gain that flexibility and diversity, companies need greater access to more carriers.

Growing their carrier network can help any business effectively tackle these challenges by introducing more options and capacity into the parcel delivery mix. Implementing a multi-carrier shipping strategy can help businesses increase stability to quickly react to carrier surcharges and rate increases and effectively control costs.

Consider Regional and Last-Mile Carriers

Shippers should consider including last-mile and regional carriers in the mix for more flexibility to compete with the massive volume of business that national carriers draw from the market. In some zones, these regional carriers offer cheaper rates and perform better than UPS, FedEx, and other major carriers. Incorporating these carriers into rate shopping initiatives can decrease parcel delivery costs and transit times by providing greater flexibility to allow shippers to select local carriers in different regions that have optimal delivery networks for serving their customers.

When tied to just one or two carriers, on the other hand, shippers cannot reduce costs or supplement capacity. Having access to more and different types of carrier services can help retailers keep customers happy while minimizing the impact of surcharges during peak season and obtaining the best value for every destination, delivery date, and product shipped. To succeed in keeping costs low, shippers should aim to choose the best fit carrier and service for each fulfilled order and leveraging regional and last-mile carriers can significantly expand carrier service options to help achieve that goal.

Logistyx offers an extensive carrier network that includes dozens of regional carriers – including LaserShip, OnTrac, and Speedee Delivery – making it easier and faster to add and maintain carriers’ rates and services in a shipper’s carrier network. Our cloud multi-carrier parcel shipping system allows shippers to access and automatically compare different carriers’ rates to select the optimal carrier service for each shipment based on unique business rules, despite the continued demand for carrier capacity.

Contact us today to learn how Logistyx’s multi-carrier parcel shipping software can help your business manage a wide range of shipping scenarios and optimize parcel shipping to help control costs.

Logistyx Increased Parcel Volume 23% with FedEx in 2020, Honored with 2021 FedEx Platinum Tier Award

Progress and innovation require working collaboratively with value-aligned partners to solve business problems. At Logistyx, we continuously deepen our ties with partners to deliver the flexibility, security, and speed customers need to accelerate success.

Our partner community includes global supply chain leaders with track records of excellence and proven commitment to the customer. This is why Logistyx is proud to partner with leading global shipping provider FedEx. As part of Logistyx’s global network of 550+ carriers, FedEx is a long-standing and leading carrier partner, providing innovative shipping solutions that enable customers to ship around the world – faster, smarter, and for less.

2020 was a year full of extraordinary uncertainties, and carriers like FedEx adopted an agile approach to shipping to create a flexible supply chain and work more effectively with shippers to address many of the challenges brought on by the COVID-19 pandemic. Carriers exhibited exceptional dependability supporting a rapid surge in e-commerce growth, an unprecedented peak shipping season, and the complexities of global vaccine distribution.

FedEx has been on the front lines, keeping supply chains moving since the onset of the pandemic and has remained a valued partner of Logistyx. In 2020 alone, Logistyx drove nearly 23% growth in volume with FedEx.

For the third year in a row, Logistyx secured FedEx Compatible Platinum Tier Award honors for 2021. Selection criteria of the award includes customer compliance; year-over-year growth in volume, revenues, and customer installations; and maintaining annual software certifications.

Designed to help organizations identify qualified, third-party shipping solutions, The FedEx Compatible Solution program requires software developers be up to date on current software for FedEx Ship Manager Server or FedEx Web Services and maintain high levels of customer satisfaction and retention. Platinum Tier status is awarded to solutions that demonstrated a high degree of capability, customer experience, and solutions.

A cloud-based Transportation Management Solution (TMS) for global parcel shipping, Logistyx’s flagship software, TME, guarantees carrier compliance, streamlines transportation execution, monitors parcel delivery movements, and identifies ongoing opportunities to increase profits per shipment. Logistyx optimizes carrier service selection and empowers shippers to deploy a more strategic, global transportation strategy to track parcel movements, provide delivery transparency, and proactively respond to unexpected events.

We’re grateful to FedEx for being a trusted partner within our extensive carrier services network and we remain committed to working together to keep driving value for Logistyx customers.

To learn more about how you can leverage multi-carrier shipping systems – and the data within them – to get the most out of your carriers and create the optimal delivery network, watch our webinar, Simplifying the Complexity of Multi-Carrier Parcel Management.

How to Analyze the Impact of Carrier Rate Changes

Carrier rate changes can be complicated. Carriers tend to release generalizations about the percent increase in rates, but these are just an average of the increases levied to various portions of the calculation. Shippers tend to react quickly to carriers’ published “average rate increases” by simply budgeting an extra matching average percentage for each carrier, but this is the wrong approach. The devil is in the details about where those changes take effect and the percentage increase applied. Speed to delivery, weight, distance, and package count are just some of the factors shippers need to consider to understand their true rate increase. Without examining the details closely, shippers’ rates could exceed the “average rate increase” and end up with a budget shortfall.

While the number of 2021 rate increases have been unprecedented, there’s no need to panic. With the right technology, shippers can avoid the pain points and embrace the bargains to bring their own average much lower. The trick is understanding how the rate hikes overlay with their own unique position and needs to better prepare for and execute negotiations with carriers.

Business Intelligence and automated scenario planning illustrate truer impact.

Businesses must manage growing parcel volumes successfully and offer cost-effective ways to meet rapidly evolving customer demands while also getting a good grasp on new rate increases and their impact on the business to effectively plan their budgets.

To get a jump on rate changes, shippers should simulate and analyze various transport factors to identify the potential impacts of rate increases before they take effect. Doing so supports contract negotiations with parcel carriers, and it gives merchants a chance to prepare by adjusting business rules, repackaging goods, or taking other steps.

To pinpoint cost-effective methods for parcel shipping, shippers can run the following types of simulations:

  • Assuming everything is the same as last year: Running re-rate scenarios shows the impact from one year to the next
  • Changing a business’s inventory footprint: Moving products from distribution centers to brick-and-mortar stores, etc.
  • Carrier network expansion: Adding new carriers to handle parcel deliveries, be it international or local
  • Changing the approach to packaging parcels: Administering simulations based on dimensional weight (size/weight of package)
  • Determining metrics and cost of shipment per SKU (cost per unit): Many organizations run SKU level analytics and business intelligence reports; parcel shipping data can help to illuminate even more impactful insights
  • Comparing last-mile/regional services against those from major carriers: Which carriers are best suited to meet delivery and cost expectations

Carriers run their own simulations to see how they can maximize efficiency and profits; technology can help level the playing field by enabling shippers to efficiently run simulations, analyze potential fees, and determine how to mitigate them, along with monitoring cost impacts that could take them by surprise.

For instance, Logistyx’s cloud transportation management system (TMS) for parcel shipping with Business Intelligence enables shippers to glean insights on their own shipping patterns, usage, and more with the ability to filter and identify specific characteristics to better understand impact. With the ability to analyze real time shipping data, shippers can better understand how factors such as distance, speed to delivery, package size, and density affect spend within their transportation landscape. Shippers can also highlight savings opportunities across attributes such as origin-destination, carrier services, modes, accessories, and more.

Once shippers run simulations to consider potential impacts and how to counter them, they can align strategy and budget to particular scenarios. Accessing and analyzing available data can help shippers truly evaluate carrier performance, ensuring carrier selection is better informed and they’re at an advantage when it comes to carrier negotiations.

Analyze your Shipping Data Today

To learn more about how cloud multi-carrier shipping technology can help you effectively analyze shipping data to better inform and execute carrier contract negotiations and yield greater returns, download our e-book: Understanding Carrier Rate Increases.

Outlook: 2021 Parcel Carrier Rates

Surviving 2020 presented a unique challenge, and for many retailers, manufacturers, and 3PLs, the goal was simply to make it to 2021. But the reward for making it to 2021 wasn’t altogether sweet. With the dawn of the new year came parcel carrier rate increases:

And now the question is: how can shippers increase profits per parcel in this shipping landscape?

Parcel Rates Increase as E-Commerce Continues Growing

Normal fluctuations in rates hover around the 4-5% mark for the shipping industry, but 2021 is poised to be anything but an average year, which means monitoring trends in shipping rates will remain a key focus. Summarizes Transportation Insight, “Beyond the average increase on standard services, it is also important to recognize that surcharges, accessorials, new fees, and tweaks to the carriers’ terms and conditions could require you to budget a 2021 cost increase closer to 8.5%. Capacity pressures created by exponential e-commerce growth during the pandemic and uncertainty about mid-year or peak surcharges for 2021 creates an environment of unknowns.”

Shippers Need to Take a Look at Carriers’ Intricate Pricing Strategies

While understanding the impact of carriers’ general rate increases is critical for organizations with any kind of parcel volume, identifying exactly which factors may drive the most significant shipping cost changes is critical for effectively planning budgets for 2021; shippers need to take a comprehensive look at the intricacies of carriers’ pricing strategies.

To optimize parcel shipping costs in the wake of 2021 rate changes, shippers should simulate and analyze various transport factors to identify the potential impacts of rate increases. Doing so supports contract negotiations with parcel carriers, and it gives merchants a chance to prepare by adjusting business rules, repackaging goods, or taking other steps.

To pinpoint cost-effective methods for parcel shipping, shippers can run the following types of simulations:

  • Assuming everything is the same as last year: running re-rate scenarios shows the impact from one year to the next and enables shippers to adjust the current carrier mix to optimize cost savings
  • Changing a business’s inventory footprint: Moving products from distribution centers to brick-and-mortar stores, etc.
  • Carrier network expansion: Adding new carriers to handle parcel deliveries, be it international or local
  • Changing the approach to packaging parcels: Administering simulations based on dimensional weight (size/weight of package)
  • Determining metrics and cost of shipment per SKU (cost per unit): Many organizations run SKU level analytics and business intelligence reports; parcel shipping data can help to illuminate even more impactful insights
  • Comparing last-mile/regional services against those from major carriers: Which carriers are best suited to meet delivery and cost expectations

Carriers run their own simulations to see how they can maximize efficiency and profits; technology can help level the playing field by enabling shippers to efficiently run simulations, analyze potential fees, and determine how to mitigate them, along with monitoring cost impacts that could take them by surprise.

For instance, Logistyx’s cloud transportation management system (TMS) for parcel shipping with Business Intelligence enables shippers to glean insights on their own shipping patterns, usage, and more with the ability to filter and identify specific characteristics to better understand impact. With the ability to analyze real time shipping data, shippers can better understand how factors such as distance, speed to delivery, package size, and density affect spend within their transportation landscape. Shippers can also highlight savings opportunities across attributes such as origin-destination, carrier services, modes, accessories, and more.

Once shippers run simulations to consider potential impacts and how to counter them, they can align strategy and budget to particular scenarios. Accessing and analyzing available data can help shippers truly evaluate carrier performance, ensuring carrier selection is better informed and they’re at an advantage when it comes to carrier negotiations.

Optimize Shipping Costs with the Right Parcel TMS

Surviving 2020 was the end goal for many over the past year, but now the focus is on recovery in 2021. Retailers, manufacturers, and 3PLs need to keep a watchful eye on carrier rates so they can prepare for whatever the new year brings, and a TMS for parcel shipping with advanced Business Intelligence can help. To learn more about how you can leverage Business Intelligence to optimize parcel shipping costs in 2021, watch our webinar: Make your Shipping Data Work for You.

 

Carriers Boost Flexibility to Aid in Rapid COVID-19 Vaccine Distribution

The availability of the long-awaited COVID-19 vaccines came just in time to lift holiday spirits. The global vaccine distribution campaign represents one of the most significant logistical challenges the world has seen in decades, and many in the logistics industry are working together to get the job done. The effort to vaccinate the globe relies on many people beyond chemists, scientists, pharmacists, and healthcare personnel. Factory workers, truck drivers, pilots, and carriers are hard at work ensuring safe and efficient delivery of these vital inoculations to locations across the world.

While parcel networks have already been operating in peak season-like conditions for months, carriers were prepared and pledged that vaccines would take precedence over delivering holiday orders. Carriers have reserved enough space in their networks to handle the expected shipments of vaccines, with many ensuring they get the fast-lane treatment meant for priority packages, with a commitment for next-day delivery. In the case of the Pfizer vaccine, carriers even waived some label printing requirements to increase the speed with which vaccines could be distributed.

On the heels of the Food and Drug Administration’s approval of the Emergency Use Authorization (EUA) for the vaccine, major carriers UPS and FedEx delivered 2.9 million Pfizer doses during the first week of availability in the U.S. Based on plans developed with the U.S. federal government’s Operation Warp Speed for vaccine distribution, FedEx and UPS have roughly divided the nation in two, with FedEx supplying the western states and UPS those in the east. Upon EUA of the Moderna vaccine, Operation Warp Speed also allocated 5.9 million Moderna doses and 2 million more Pfizer doses for delivery the week of December 21.

Since the beginning of the COVID-19 pandemic in mid-March, many major carriers have been active in their relief efforts leading up to their roles in vaccine distribution, including delivering personal protective equipment (PPE) and humanitarian aid shipments on a global level.

2020 has been full of unparalleled unknowns, many of which came to a head in the final month of the year with the fastest vaccine development and global rollout known to date, leaving supply chain leaders to act quickly. Undoubtedly, adopting an agile approach to shipping to create a flexible supply chain has helped these carriers work more effectively with pharmaceutical and healthcare shippers to put this massive vaccine distribution plan into action. The extraordinary steadiness from carriers supporting an unprecedented peak shipping season and vaccine distribution has heralded a happy holiday and a hopeful new year.

At Logistyx, we’re grateful to the more than 550 carrier partners within our extensive carrier services network for their part in the successful global distribution of these critical COVID-19 vaccinations.

FedEx Extends Peak Surcharges into 2021

As is so often true in times of crisis, the industries hardest hit by the COVID-19 pandemic are also the ones that people depend on daily: namely shipping providers like UPS, FedEx, and the United States Post Office.

Faced with extremely high demand for capacity and increased operating costs across its network, in August, FedEx followed the lead of UPS and the United States Postal Service by announcing new peak season surcharges, effective early November. Company officials said they did this not only to provide their customers with the best possible service during an understandably challenging time, but also to help mitigate risk from what was expected to be historic holiday shipping volumes.

These changes were expected to be in effect until January 17, 2021. However, with Christmas not yet here, the company has already announced they will be extending these surcharges long past their original date of expiration.

FedEx Surcharges and the 2020 Peak Season: What You Need to Know

When the surcharges were originally announced, FedEx indicated the changes would only apply to shipping customers reaching a certain package volume threshold. Specifically:

  • Customers had to ship more than 35,000 packages on average per week between October and November for surcharges to apply later in the year.
  • The amount of the surcharge would depend on how much more they were shipping during October and November than they were between February 3, 2020 and March 1, but residential shipments would see surcharges ranging between $1.00 and $5.00.
  • FedEx announced that even FedEx Smart Post (when FedEx hands packages to the USPS for crucial last-mile delivery) would see an additional increase of $1.00 per package for any items shipped between November 2 and November 29.
  • From November 30 to December 6, Smart Post surcharges would increase to $2.00 per package, after which the surcharge would go back to $1.00 until January 17, 2021.

Or at least, that’s how things were supposed to go.

As of December 22, 2020, FedEx is the first carrier to confirm they will not be ending their surcharges as originally planned – but few expect them to be the last. A large part of this has to do with ongoing market conditions that are making things challenging. Not only is FedEx dealing with limited carrier capacity, but they also have a significantly heightened residential delivery volume right now thanks to 2020 peak season demands. This, coupled with the fact that there are relatively few available carriers for parcel shipping, has created something of a perfect storm in the worst possible way.

According to FedEx’s own website, there are three surcharges that will officially begin on January 18, 2021, and that will continue “until further notice.” These are:

  • Peak – Oversize Charge Surcharge: This applies to U.S. Express Package Services, U.S. Ground Services, and International Ground Service, and comes in at $30.00 per package.
  • The Peak – Additional Handling Surcharge: This impacts all of the same parcel shipping services as outlined above and adds an additional $3.00 charge per package.
  • Peak Surcharge for FedEx Smart Post Package Services: This adds an additional $0.75 cents per package.

The announcement that FedEx Smart Post surcharges will continue is particularly bad news for smaller e-commerce shippers, as they’re the ones that tend to deal with higher volumes of lighter packages. Experts agree that businesses in the cosmetics and apparel industries are likely to feel the immediate impact of this announcement.

Some people speculate that FedEx surcharges are here because the company truly needs them. Others think this is a clear-cut case of “they’re doing it because they can get away with it.” Regardless, it’s safe to say that a multi-carrier shipping solution has never been more critical for reducing parcel transportation spend.  To learn more about multi-carrier shipping technology, watch the Logistyx webinar, Simplifying the Complexity of Multi-Carrier Parcel Management.

Sales Boom; Will Carrier Capacity Limitations Doom?

Hanukkah gifts. December birthdays. Organized holiday shoppers. Plenty of scenarios exist in which customers become disgruntled due to unforeseen e-commerce delivery delays in early December, but what happens if it keeps getting worse due to carrier capacity limitations?

Yesterday’s Wall Street Journal feature, “UPS Slaps Shipping Limits on Gap, Nike to Manage E-Commerce Surge,” detailed what happened this week when UPS stopped picking up parcels for not just these two brands but at least six large retailers and characterized the development as “an early sign that the pandemic-fueled online shopping season is stretching delivery networks to their limits.” According to the article, the internal UPS message called for “No exceptions.”

Total Retail offered its own take on the development, including the likelihood that the situation, “only figures to intensify as we get further into the holiday shopping season.”

Sales are booming

According to Digital Commerce 360 and Adobe Analytics, “Ecommerce sales crossed a record $5 billion on Thanksgiving, surged 21.6% on Black Friday and increased 15.1% on Cyber Monday. All of this growth follows a much-busier-than-usual start to November, driven by retailers trying to proactively offset this Cyber 5 crunch by offering more aggressive deals much earlier in the season than usual to get customers shopping sooner.

Still, big retailers should not be surprised about this. Not only have analysts, media and a wide range of other retail and fulfillment experts been predicting this change in consumer behavior for most of the year. The carriers have also been proactive in alerting retailers this difficult reality was likely to take shape; many of Logistyx clients were notified months ago.

Will carrier capacity limitations be dooming?

It depends almost entirely on each retailer’s preparedness. Retailers only prepared to tap the services of one carrier could struggle mightily to satisfy customers quickly if they exceed daily carrier capacity for multiple consecutive days. Without any lull in parcel shipping volume, the backlogs will grow, and a growing volume of parcels could sit on the dock for increasingly long wait times as the month goes on.

Retailers who embraced multi-carrier parcel shipping and the benefits of real-time rate shopping, or those who prepared diligently to adopt this model in 2020 prior to peak season, find themselves in a much more manageable position. Given yesterday’s news, those retailers are positioned to consume whatever capacity UPS has to offer them, tap into other national carriers to effectively ship the rest, leave nothing on the dock, and start tomorrow with a clean slate. Retailers using Logistyx can even continue to rate shop to contain costs to the extent possible.

Fearing all national carriers would eventually limit capacity during the holiday season, many retailers went further, incorporating more local last-mile and regional carrier services into the mix, such as LaserShip, OnTrac, and Speedee Delivery. This provides more capacity inventory to rate shop, in addition to another failsafe should more carriers enact daily parcel limits.

Most of December and January still loom

With three weeks still remaining before Christmas, the situation looks grim for unprepared retailers, who likely know a growing volume of returns awaits them on the other side of the holidays.

Communicate clearly to limit customer losses

While much can be done to prepare for future peak seasons, shore up fulfillment capabilities, and better care for customers going forward, retailers should allocate some resources for damage control right now. When delivery delays cannot be avoided, clear communication will likely be their best client retention tool.

Refine delivery estimates. Avoid over-promising. Be realistic. Consider make goods and special offers that can turn disgruntled customers into long-term supporters. Commit to doing better for customers in the future.

2020 has truly been a year like no other, and unprepared retailers are pinning some of their December wishes on customers understanding the unprecedented difficulties in shipping products quickly this year. While other merchants worked hard to prepare in 2020 to maintain impressive fulfillment timelines throughout the holidays, consumers just might be swayed to forgiveness if retailers give it to them straight and commit to doing better in the future.

COVID-19 Still Wreaking Havoc on Shipping: FedEx Announces APAC Surcharges

COVID-19 continues to wreak havoc on supply chains and shipping around the world, and an e-commerce-focused peak season is only piling on. Following FedEx’s previously announced rate increases and late fees set to take effect in 2021, the shipping giant implemented another surcharge increase for parcel and freight shipments originating in Asia Pacific (APAC).

“Beginning Nov. 30 through Dec. 27, the surcharge amount for FedEx Express international parcel and freight shipments originating in Japan, Korea, Hong Kong and the Philippines will increase as will the surcharge amount for FedEx Express international parcel shipments originating in China. On Dec. 28, these surcharge amounts will return to current levels. Updated amounts can be found here.”

According to FedEx, the reasoning behind the increased surcharge is limited air cargo capacity and incurred incremental costs related to COVID-19.

As Logistyx previously noted: As consumers increasingly turn to omnichannel shopping to safely buy goods during and beyond the pandemic, shipping volume has increased exponentially, putting increased demand on carriers and leading to the rollout of these surcharges and increased rates to offset costs.

New call-to-actionGrowing their carrier network can help any business effectively tackle these challenges by introducing more options and capacity into the parcel delivery mix. Implementing a multi-carrier shipping strategy can help businesses increase stability to quickly react to carrier surcharges and rate increases and effectively control costs. By leveraging a cloud multi-carrier shipping system, businesses can provide a consistent level of service to customers despite the surging demand for carrier capacity by accessing and automatically comparing different carriers’ rates to select the optimal carrier service for each shipment.

Logistyx continues to offer advice and solutions for shippers seeking to adapt to these changes and effectively manage costs; check out the following blog posts:

And white papers:

To learn more about how a multi-carrier shipping system can help your business optimize parcel shipping to help control costs, contact us today.

Preparing Global Logistics for COVID-19 Vaccine Distribution

As several experimental COVID-19 vaccines approach late-stage testing, their manufacturers have begun working diligently with technology partners, carriers and others involved in the logistics of distributing a potential vaccine to populations around the globe to assemble the necessary processes, procedures and instruments to safely and effectively move and disseminate the eventual inoculations.

In addition to some of the early considerations for shippers, manufacturers and other industry professionals relating to the scale, distribution and shipping requirements of a potential vaccine, DHL and other carriers have started making adjustments to prepare. They’re adding cargo service routes, increasing flight schedules to provide crucial transport infrastructure and taking other steps to prepare in anticipation of the potential global delivery of a COVID-19 vaccine.

On top of having the transport infrastructure in place, many carriers and pharmaceutical companies have been shoring up equipment and technology that will meet the complex set of protective measures required for maintaining the efficacy of a vaccine during transport, including precise refrigeration and temperature settings. According to The New York Times, many of the vaccines under development will need to be kept at temperatures as low as minus 80 degrees Celsius (minus 112 degrees Fahrenheit).

Managing global distribution strategies for such a critical product on such a scale creates considerable operational challenges. That’s why many pharma companies and global carriers have turned to transportation management technology providers to help enhance their preparations to transport the highly temperature-sensitive COVID-19 doses.

Just as Logistyx was on the forefront to help Gilead move its investigational drug against the novel coronavirus that causes COVID-19 to medical facilities in continental Europe, we’re helping another leading pharmaceutical manufacturer effectively execute its vaccine release. From rigorous temperature-controlled storage and transportation to uninterrupted logistics management information and real-time status updates, this pharma company has a unique set of carrier service requirements. Logistyx is working around the clock with the pharma leader and its carrier services network to ensure the uninterrupted availability of a quality vaccine by building a custom network of carriers capable of playing a role in this critical task.

ebook logistyx future-proofing-supply-chainPlanning now for the eventual availability and distribution of a COVID-19 vaccine allows logistics experts, pharmaceutical distribution specialists and global carriers to prepare for any potential hiccups in the process. Likewise, cloud technology like Logistyx helps decrease supply chain risk, an incredibly important initiative when it comes to something as vital as the multifaceted distribution of an initially limited supply of a life-saving vaccine. Logistyx TME helps optimize parcel shipping by improving the speed, accuracy, and flexibility of the supply chain, and a digitized supply chain improves a company’s ability to anticipate risk, improve transparency and coordination across the supply chain, and manage any issues that arise from increasing complexity. When it comes to the global distribution of vaccines or parcels of any kind, TME helps shippers minimize disruptions and solve those that do arise more quickly.

For more information about how Logistyx’s cloud TMS for parcel shipping can help you effectively plan for and manage supply chain challenges, contact us today.

Three Delivery Trends Set for Growth: Ken Fleming Talks to Parcel and Postal Technology International

Driven by a shift in consumer expectations to a ‘delivery from anywhere, to anywhere, at any time’ mindset, Ken Fleming, President of Logistyx Technologies, discussed three trends that are set to offer increased convenience for customers, carriers, and companies with Parcel and Postal Technology.

Saturday delivery for no extra charge

In the summer, UPS announced it would launch a Saturday service across eight European countries at the same price as weekday delivery.  As its rationale, the company cited research from IMRG Capgemini Online Retail Index, which said reported ecommerce sales in the UK grew by a third (33%) in May.

ebook logistyx future-proofing-supply-chainHowever, Ken sheds some additional light on why this is set to be a growing trend: “There are potential cost implications in offering a six-day standard service, but operationally it is not a massive burden. It will help flatten couriers’ weekly peak, whereby parcels from shippers that have a Saturday collection, but no delivery until Monday, stack up at the courier’s warehouse.  I would be very surprised if the trend doesn’t continue across the industry, especially due to the recent increase in e-commerce sales, which shows no sign of dropping off.  If carriers don’t start to add Saturday, or even Sunday delivery at a standard weekday rate, capacity in the industry may not keep up with demand.”

Increased on-demand changes to delivery

While it isn’t new in itself, it is significant the UK’s Royal Mail added in-flight options to its delivery service in July.  Due to the volumes it handles, this announcement represents a massive and challenging undertaking for the organisation.

Ken comments: “On-demand delivery changes tend to be more common with standard two to five-day services.  After all, if you want guaranteed next day delivery, you will likely pay for it and be happy to ensure you are available to receive the parcel on that day.  However, not many people want – or are able – to be available at any time over several days or to have to queue up to collect a non-delivered parcel from a depot, even at the best of times.  The huge spike in e-commerce means more carriers will have to give on-demand flexibility, or they will risk losing business to competitors who can offer it.”

Delivery from store

An increasing number of large and big-brand retailers are moving towards ship from store.  From the retailer’s point of view, it is both extremely efficient and – by reducing the movement of the stock – a greener option.  At the same time, it enables retailers to offer same day delivery via courier, particularly in urban areas.

“There are two key factors which must be in place to enable retailers to provide ship from store: accurate inventory systems, and a carrier management system which is intelligent enough to suggest delivery from store as an option when the order is placed.  From a customer perspective, they may not even realize their item has been sent from a store rather than an RDC,” comments Ken.

To facilitate same day delivery from store, it’s likely shippers will need to introduce new carrier contracts – including local couriers, who can deliver by moped, bike, or electric vehicle – or even potentially by drone or robot.  By shipping local to local there can be a significant reduction in miles traveled, reducing the environmental impact of the delivery.

The recent increase in e-commerce versus in-store transactions isn’t likely to go away any time soon and seems set to help the parcel shipping industry move from ‘fast and free’ towards transparent, customizable delivery options, putting the convenience of the customer at the heart of the service.

For more information on parcel shipping trends, check out the Logistyx Research Solutions.

 

FedEx Announces 2021 Rate Increases

Retailers can continue to expect rising prices for shipping parcels beyond peak season 2020, as FedEx recently unveiled rate increases and late fees set to take effect in 2021. Starting in January, FedEx will raise rates an average of 4.9% for its Ground, Express, and Home Delivery services, along with charging a 6% late fee to U.S. FedEx Express and FedEx Ground customers who don’t pay invoices within their agreed upon payment terms.

These latest rate increases come on the tail of FedEx and other major carriers levying surcharges in advance of the 2020 holiday shopping season. All together, these recurrent carrier rate increases point to the continued growth of e-commerce, propelled in large part by the COVID-19 pandemic and consumers’ shifting shopping behaviors. According to a consumer insights survey by Radial, for example, 66% of U.S. shoppers anticipate they will increase their online purchases during the 2020 holiday season, with 60% planning to shop less in-store this season due to fear of COVID-19 exposure.

As consumers increasingly turn to omnichannel shopping to safely buy goods during and beyond the pandemic, shipping volume has increased exponentially, putting increased demand on carriers and leading to the rollout of these surcharges and increased rates to offset costs.

As retailers continue to face these rate increases in tandem with higher levels of online orders, they’re challenged with the need to manage these volumes successfully and offer cost-effective ways to meet rapidly evolving customer demands. Growing their carrier network can help any merchant effectively tackle these challenges by introducing more options and capacity into the parcel delivery mix.

New call-to-actionImplementing and optimizing a multi-carrier parcel shipping strategy serves as a key component in cost control for retailers and their ability to quickly react to carrier surcharges and rate increases. By leveraging a cloud multi-carrier shipping system, retailers can provide a consistent level of service to customers despite the surging demand for carrier capacity by accessing and automatically comparing different carriers’ rates to select the optimal carrier service for each shipment.

To learn more about how a multi-carrier shipping system can help your business optimize parcel shipping to help control costs, contact us today.