In this article, we summarize Supply Chain Brain’s article titled “Delivery Area Surcharges and Other Parcel Rate Hikes to Watch Out for in 2024” and how to address parcel rate hikes.
The article states, “With the new year well underway, shippers are free from the tyranny of urgent holiday order fulfillment. Now, they can shift their attention to the general rate increases (GRIs) levied by parcel carriers, and focus on mitigating the impact on their shipping costs.
The 2024 GRI announced by UPS and FedEx came with a headline 5.9% figure — a full percentage point lower than last year. In a vacuum, that might sound like a boon for shippers. But the reality is that 5.9% is still the second-highest GRI of all time, and the true impact to shippers is much higher.”
Article Summary and Key Takeaways:
- Shippers face general rate increases (GRIs) levied by parcel carriers in 2024.
- The announced GRI of 5.9% by UPS and FedEx may seem favorable, but it is still the second-highest GRI in history.
- Annual parcel cost increases compound over time and significantly impact shipping costs.
- Certain shipment profiles, such as those involving remote areas, are particularly affected by GRIs.
- The topline GRI figure does not account for surcharges and
accessorial charges, which can comprise a significant portion of total
shipping costs.
- Hidden within surcharges are higher labor costs and rule changes that carriers use to raise revenue.
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