The major carriers have announced significant rate increases for 2021. The rate increases for the coming year are anything but ordinary. Yes, both carriers tend to raise rates at the start of any year. Yet, FedEx and UPS 2021 GRIs, or general rate increases, come at a tumultuous time. And here's the kicker. Those increases were announced before the announcement of a possible viable Covid-19 vaccine. With that in mind, the 2021 GRIs are likely to see even higher percentage increases soon. And supply chain leaders need to know how that amounts to an absolute necessity for more technology and analytics.
The driving forces for the changes are easy to understand. E-commerce volume went through the roof in 2020. The Centers for Disease Control and Prevention's continued efforts to halt the surge of brick-and-mortar visits will inevitably lead to stronger demand for e-commerce.
Specifically, both FedEx and UPS 2021 GRIs are subject to residential deliveries' continued demands following Covid-19. FedEx states, "entering this holiday peak season with extremely high demand for capacity and are experiencing increased operating costs across our network. We anticipate residential volume to continue to surge into the new year.
To continue providing our customers with the best possible service during this challenging time, we are implementing several surcharges and fees. The surcharges implemented on June 8, 2020, have an updated effective period, which now includes an expiration date."
Meanwhile, UPS has taken similar rate precautions when assessing GRIs for the coming year.
Both FedEx and UPS 2021 GRIs will have a net average increase of 4.9%. But that excludes all affected peak surcharges, surcharges assessed due to Covid. It doesn't consider the vast uncertainty surrounding a Covid 19 distribution strategy. According to Supply Chain Dive, Pfizer has already confirmed vaccine distribution partners. They include DHL, FedEx and UPS as primary carrier partners. Now take that in the context of a recent announcement of two viable vaccines. The current GRIs are already outdated.
Simultaneously, FedEx has announced a 6% late fee to shippers and a host of other applicable shipping surcharges. UPS has announced an extended list of areas surcharges ZIP Codes. That's in addition to surcharges for value-added services and more handling charges. The only way to manage the increases rests in the use of technology and analytics.
Thriving in the era of e-commerce and COVID-19 means shippers need help. Shippers need a way to look beyond the noise and find opportunities for improvement. To that end, business intelligence and advanced analytics can help. They provide an immeasurable resource for process improvement. In fact, shippers that seek to leverage such technologies should follow these steps.
Understanding the FedEx and UPS 2021 GRIs is complicated at best. Yes, both carriers have announced general rate increases that mirror and add to existing surcharges and GRIs of past years. Also, both carriers have left some wiggle room in rate announcements. That means an inevitable GRI is on the horizon for the next year that will go beyond those already released. Therefore, shippers, carriers, and those working across any mode need a data-driven strategy for success. Find out how your organization can apply an actionable, easy to integrate solution by visiting Intelligent Audit online today.
Set up a call with one of our experts to discuss how Intelligent Audit can help your business uncover opportunities for cost reduction and supply chain improvements through automated freight audit and recovery, business intelligence and analytics, contract optimization, and more.
When creating a strategy to optimize your shipping network, you must keep in mind that each new warehouse should accomplish 3 goals