Most shippers are waiting for the 2019 General Rate Increase (GRI) announcement from the major shipping carriers. But there are some other recent changes that can potentially affect your shipping costs, especially if you ship larger packages.
Here are three major FedEx and UPS holiday fee changes you need to know about.
Fuel Surcharge Increases
On September 10, FedEx increased their FedEx Ground and FedEx Express fuel surcharge rates by 1% and 0.75%, respectively. Effective October 1, UPS increased fuel surcharges for Ground and Domestic Air by 0.25%.
UPS changed their fuel surcharge rating structure this past spring, as well. In the past, UPS international exports had the same fuel surcharge as domestic air services. As of April 2018, however, the International Air Export rate changed, adding a few percentage points of increase to the cost of export shipments.
Both carriers have new indexes used for calculating fuel surcharge for domestic air, ground, international export, and international import services. In late May 2018, for example, the Domestic Air fuel surcharge was 8.25% while the International Air Export surcharge was 10.5%.
Over Max, Additional Handling, and Unauthorized Package Surcharge Changes
There were a handful of FedEx and UPS holiday fee changes that specifically affect shippers with large packages.
For FedEx, a peak season large package surcharge will be in effect from November 19 through December 24. Additionally, FedEx recently raised their Ground Unauthorized Package and Additional Handling Surcharge for packages over 70 lbs. Lastly, an increase to the Oversize Charge was put in place September 3.
With UPS, the Peak Surcharge for Over Max Limits began October 1. The Over Max fee also increased from $650 to $815.
The summertime increases for UPS are also important to note for Additional Handling Surcharge and Large Package Surcharge. Earlier this year, UPS increased the Additional Handling Surcharge surcharge from $12 per package to $19. The Large Package Surcharge fee also changed for domestic residential deliveries from $80 to $90.
Shipping Charge Correction (SCC) Audit Fee Changes
Earlier this summer, UPS introduced an audit fee for Shipping Charge Corrections. The fee implemented was the greater amount of $1 per package or 6% of adjusted revenue for the period of the invoice. The fee gets applied whenever the average shipping charge correction in an invoice period exceeds $5.
However, on October 22 this Shipping Charge Correction fee application will occur when the average shipping charge correction exceeds $2 instead of $5.
What Does It All Mean?
Adding it all up, these FedEx and UPS holiday fee changes mean that a strong relationship with your carrier is essential to managing costs. A dialogue with your carrier understanding how these changes can affect your shipping mix is critical in managing shipping costs in 2018 and the holiday season. Finally, having the right technology and tools in place to utilize the most cost-efficient carrier services then becomes essential.