Topics: Parcel shipping, Parcel Spend Management
As we look ahead to 2024, businesses relying on parcel shipping services must brace for another round of General Rate Increases (GRIs). In a bid to keep up with inflation and operational costs, carriers like UPS, FedEx, DHL, and USPS have announced their updated prices, continuing a trend that's becoming a mainstay in the shipping industry.
While the instinct might be to view the GRI as a uniform hike in shipping costs for 2024, the reality is more complex, with surcharges and varying rates across services complicating the picture; shippers must adopt a detailed, strategic approach to dissect these increments and leverage sophisticated tools to soften the financial blow of these changes.
FedEx and UPS: A Closer Look
FedEx and UPS have announced a 5.9% GRI for 2024, maintaining their practice of moving in lockstep with their rate increases. Despite the similarity in overall GRIs, a detailed examination reveals variances in demand surcharges like additional handling and oversized, which could significantly affect shippers depending on their specific needs.
USPS Stays Competitive
USPS has made a strategic move by eliminating the end-of-year demand surcharge, offering a more attractive option for the holiday season. This decision, amidst a modest average increase of 3% for various mailing services, places USPS in a competitive position. The USPS's upcoming January rate hike for products such as the new Ground Advantage service is poised to intensify competition with FedEx and UPS.
DHL Aligns with Market Leaders
DHL Express is increasing rates by 5.9%, mirroring the hikes of FedEx and UPS, but much lower than the 2023 GRI of 7.9%. DHL's lack of a domestic division in the U.S. somewhat cushions the impact. However, the carrier's GRIs still provide a glimpse into global shipping trends and the broader economic environment.
Tackling GRIs with Smart Strategies
Accepting GRIs as an unavoidable factor doesn't mean businesses are without recourse. A proactive analysis of the increases and an adaptive shipping strategy can mitigate the financial impact, especially for high-volume shippers.
- Break Down the GRIs: Understand the detailed implications of rate increases on your business by dissecting carrier surcharges and reflecting on historical shipping data.
- Seek Cost Optimization: Identify saving opportunities by negotiating with carriers and reviewing internal processes. Exploring alternatives like regional carriers or freight consolidation might also yield cost benefits.
- Evaluate Carrier Selection: Assess your carriers' performance meticulously to make informed decisions during negotiations and for future carrier strategies.
- Leverage Data for Decision-Making: Employ technology solutions that provide analytics to optimize shipping, using comprehensive dashboards and custom reports for better insights.
As shipping costs continue to rise, yearly evaluations and adjustments in shipping strategies are crucial for businesses to remain competitive. Cass Information Systems equips businesses with the necessary tools and analytics to navigate these changes, ensuring they are ready for 2024 and beyond. In our white paper, A Shipper's Guide to 2024 GRIs, we present shippers with strategies for navigating GRIs, such as understanding the details, exploring cost optimization, and managing carrier selection.
Optimizing Shipping Strategies with Cass's Parcel Spend Management Solutions
Cass Information Systems provides a comprehensive parcel spend management solution that empowers shippers with advanced analytics and dashboards for cost optimization, carrier performance analysis, and invoice accuracy. Our technology aids in identifying savings opportunities, improving billing accuracy, understanding carrier reliability, and recognizing shipping trends. With customized reporting and GRI impact analysis, we offer shippers a granular look at potential cost impacts and savings, enabling shippers to make informed decisions and negotiate better rates and terms with carriers.
In our white paper, A Shipper's Guide to 2024 GRIs, we explain why shippers should continuously reevaluate and adjust their strategies to optimize costs in response to yearly rate changes. You are not powerless against GRI increases; strategize your approach to navigate and mitigate their impact effectively with Cass.
