PFANEWS
News and Happenings from the Pedorthic Footcare Association
2013 Ground Package Rate Increases
As stated earlier , both the FedEx Ground and UPS Ground rate increases are based on a 5.9 % increase in the base rate , less a 1 percentage point reduction to the index-based ground fuel surcharge . But let ’ s examine the true impact to your bottom line based on the weight of packages you ship and the zone to which they are shipped .
FedEx Ground and UPS Ground have identical published base rates for ground packages up to 70 pounds , making apples to apples comparisons possible . Overall , the largest percentage increase for both carriers occurred on packages weighing 20 pounds and less , regardless of zone . This is a result of many shippers migrating lower zone air shipments to the carriers ’ more economical ground services . The increase for all packages under 20 pounds ranges between 5.8 % and 8.9 % over 2012 rates .
Air Rates Increase Dramatically for Smaller Packages
The increases in base rates for FedEx Priority Overnight ranged from 4.0 % to 6.5 % for packages 150 pounds and lighter . On the UPS side , base rates for UPS Next Day Air increased an average of 5.1 % to 7.7 %. Of note this year is that FedEx Envelopes are not leading the rate increase tables in terms of largest percentage rate increase , for the first time in recent memory . UPS Letters , true to recent form , were above the stated average in all but one Zone . This year ’ s highest rate increases appear to have less to do with weight than distance , according to our analysis . Everything from Envelopes / Letters to 150 pound packages is seeing above average rate increases beyond Zone 4 / 104 . This is bad news for higher zone shippers .
As we said at the outset of our article , this year ’ s largest rate increase percentages are featured on many of the slowest and least expensive shipping options the carriers offer . As we begin to dissect slower and more economical services , we correspondingly begin to see larger average rate increase percentages . FedEx Standard Overnight and UPS Next Day Air Saver saw rates on shipments of nearly all weights and to almost every zone rate increase beyond the stated averages the carriers announced . FedEx Standard Overnight increases range from 4.6 % to 7.5 % on packages less than 150 pounds , while UPS Next Day Air Saver increases range from 5.2 % to 8.5 % over the 2012 rates .
Correspondingly , our analysis shows that the rates for shipments in every weight break and every zone we examined for FedEx 2Day and UPS 2nd Day Air went up by more than the stated averages the carriers announced . The rate increases for FedEx 2Day ranged from 6.5 % to 7.5 % for packages less than 150 pounds we analyzed ; and all rates for packages in the same range increased anywhere from 7.5 % to 8.8 % over 2012 rates for UPS 2nd Day Air .
Some of the largest increases occur with FedEx Express Saver and UPS 3 Day Select services — some weights and zones actually hitting double-digit rate increases , which we haven ’ t seen for a long time . Every FedEx Express Saver weight and zone we analyzed featured rate increases above the stated carrier average , ranging from 6.0 % to 10.3 %, with the largest increases in the shorter zones . UPS also took substantial increases on its 3 Day Select service as you can see in the below table , with increases ranging from 5.4 % to 9.7 %.
UPS Air Rates vs . FedEx Air Rates
Our analysis examines UPS Daily Rates and FedEx Standard List Rates . It is important to acknowledge that in early 2011 , UPS introduced a new set of base rates , Standard List Rates . UPS Standard List rates are higher than UPS Daily Rates and virtually identical to FedEx Standard List Rates . UPS has been placing all new customers who establish a UPS scheduled pickup account on Standard List Rates , rather than Daily Rates as they did in the past .
And keep in mind that both carriers have Retail Rates , with higher base rates than either Standard or Daily Rates , which affect customers who ship from a retail store location . These rates , while not included in this analysis , are also increasing for 2013 .
Don ’ t Forget About The Surcharges !
Both FedEx and UPS also announced increases to other fees and surcharges for 2013 . It may surprise you to learn that fees for extra services can account for up to 20 % or more of your total transportation costs .
Conclusion
As it has been in the past , the real impact of the 2013 rate increases depends on what you ship , where you ship it , and the size and weight of your packages . The important takeaway when thinking about your shipping expenses in 2013 is that the announced average increases paint an inaccurate picture of the true impact these new rate increases could have on your business . If you find yourself confused by rate bases , average increases , and surcharges – rest assured that you are not alone
10 Pedorthic Footcare Association www . pedorthics . org