New Year, New Horizons: Transportation Industry Gets Ready to Take On 2023

As the transportation industry waves goodbye (and good riddance) to 2022, innovative logistics professionals are already working hard to make 2023 a banner year for the global transportation industry. Yet even with their efforts, 2023 is bringing the heat in its earliest months: hardline Teamster leadership is entering the new year ready to strike, and general rate increases (GRIs) and stubborn inflation have shippers shaking in their boots. With 2023 ready and raring to go, here are the eight news updates and trends happening in the industry that’s always moving.

UPS to Continue Service Despite Threat of Strike

As the imminent threat of a nationwide rail strike subsides, shippers are turning their attention to a new, worrying prospect in logistics labor relations. International Brotherhood of Teamsters General President Sean O’Brien and General Secretary-Treasurer Fred Zuckerman have stated their intention to instruct UPS’ 380,000 Teamsters to strike if negotiations fail to produce a contract by Aug. 1.

Despite the looming threat of a strike, UPS President Carol Tomé has signaled the parcel shippers’ intent to continue service should a labor disruption occur. As FreightWaves reports, “UPS has informed its managers not to schedule any paid time off during July and August in case parcels are required to be moved.”

FedEx Launches Consolidated Returns Service 

To help shippers save on costs in an increasingly expensive reverse logistics marketplace, FedEx has announced plans to launch a consolidated returns service. “Shoppers who purchased from participating merchants can drop off the items they wish to return – no box or label required– at approximately 2,000 FedEx Office locations,” according to a Dec. 12 statement from FedEx.

As the returns market grows, FedEx continues to explore innovative alternatives for our customers,” said Ryan Kelly, Vice President of E-Commerce & Retail Marketing for FedEx Services, “While this solution will provide a low-priced returns option for merchants, it’s also a simple, convenient process to help retailers deliver a shopper-friendly experience.”

FedEx Announces 2023 Rate Increases to Flagship Services

With the new year come new rate changes from FedEx. The parcel carrier has announced a slew of changes to be implemented in the early months of 2023, including an 8% late fee for U.S. Express and Ground packages not paid according to approved payment terms, as well as a $13.25 surcharge on shipments to domestic packages shipped to remote ZIP codes. 

These changes, accompanied by rate changes affecting FedEx Freight, fuel surcharges, and FedEx OneRate, come amid increased competition in the parcel logistics sector. “We regularly evaluate our shipping rates and fees and adjust them when needed,” says the FedEx website, detailing the rate increases, “This enables us to keep investing in our business so we can continue delivering the shipping solutions you need and the excellent service you’ve come to expect from us.

Airfreight Demand Plummets as Shippers Flock to Ocean

As ocean rates continue to plummet, shippers are increasingly diverting freight from air cargo lines to more affordable ocean transportation. 

According to Xeneta, airlines experienced a 2% drop in demand month-over-month in November, constituting the ninth consecutive month of falling airfreight volumes. As airfreight demand falls, ocean shipping rates continue to plummet, leading many shippers to reevaluate their operations. According to Freightos, China-North America trade lane rates fell more than 40% YoY. 

Walmart to Expand Drone Delivery in Arizona, Florida, Texas

With competition for fast shipping continuing to escalate, mega-retailer Walmart is partnering with DroneUp to expand drone delivery. The drone delivery service, which plans to offer same-day service in parts of Arizona, Florida, and Texas, transports items up to ten pounds as soon as 30 minutes after ordering, according to a Dec. 15 press release.

Being on the forefront of that innovation at Walmart is something we’re proud of,” said Vik Gopalakrishnan, vice president of innovation & automation at Walmart U.S. “It may seem like a futuristic option, but it’s giving our customers what they’ve always wanted, and that’s time back to focus on what is most important to them.

LTL Facing Rate Increases as Industry Stabilizes Post-Pandemic

In another sign of the logistics industry’s self-regulating following the dramatic highs and lows of the COVID-19 era, GRIs, are “coming in level or a little light of last year’s increases,” according to FreightWaves.

This GRI will affect our class tariffs and is intended to partially offset the rising costs of real estate, new equipment, technology investments, and competitive employee wage and benefit packages,” said Todd Polen, VP of Pricing for North Carolina-based 3PL Old Dominion. “Although the GRI will impact each customer differently based on specific shipment lanes and distance traveled, it is consistent with our long-term yield management philosophy and the overall impact of the increase is anticipated to be approximately 4.9 percent.

Sky-High Inflation Forces Supermarkets to Revamp In-House Lines

As inflation soars, supermarkets look for innovative solutions to lure cash-strapped customers into the aisles. Increasingly, supermarkets are investing in in-house product lines, which are often less expensive than name-brand products and more profitable. In addition to benefiting profit margins, investments in cost-effective product lines can be used to bolster customer loyalty during challenging times. 

There’s no question that more and more people are turning to private labels,” said Julian Skelly, the head of the European retail practice at consulting firm Publicis Sapient in an interview with The Wall Street Journal, “Everyone’s cost-conscious right now. If they are not already being impacted by the cost-of-living crisis, they are afraid that they will be.

Produce Sales See Holiday Boost

As logistics professionals across the supply chain recover from holiday feasts and festivities, those in the perishable transportation sector are taking note of which fresh produce products flew off the shelves this holiday season and which were left in the cold. According to Donald Russo, Category Manager, Produce, for New York-based Baldor foods, in an interview with FreshPlaza, said color sells: “Anything with red or pink color does well. We see great sales and beautiful creations from the many different winter chicories and radicchios we carry, both domestic and imported varieties. We also see some great bright colors coming from different winter citrus items coming into season.” 

Is Your Transportation Business Ready to Put Rubber to the Road in 2023? 

After a challenging 2022 (to put it kindly), logistics professionals know better than ever the importance of optimized operations. For shippers looking to move forward in the New Year, Intelligent Audit offers a vast suite of vital logistics software assets, including:

  • Software Driven Freight Audit and Recovery
  • Cloud-Based Business Intelligence and Analytics
  • Streamlined Finance and Accounting Tools

With over twenty years of experience, Intelligent Audit is a global leader in logistics innovation. Begin the new year right, and start a conversation with Intelligent Audit today

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