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.