Once again, the end of the year is right around the corner, which means your shipping costs are about to go up. So how bad is it going to be this time? FedEx recently announced its rate increases for 2013 for both Domestic and International Express services and you should be prepared for an even larger increase than was seen in 2012. See below for some rate increases that will likely affect your shipping budget:
- Residential delivery charge will increase by 6.6 percent
- Declared value charges for items over $100 will increase by 6.25 percent
- Address correction charge will increase by approximately 9 percent
- Delivery area surcharges will go up by 8.3 percent for residential and 7.5 percent for commercial
So while FedEx's general rate increase is the same as last year's at 5.9 percent (net increase of 3.9 percent when you factor in a 2 percent fuel surcharge reduction), many customers could see their rates go up as much as 10.5 percent depending on their shipping zone and level of service. And no one is immune to the inevitable fees and charges that arise from shipping errors and address changes.
Unfortunately, it may be the more cost-conscious shippers that are hardest hit by these increases. FedEx knows that more companies are opting for a lower level of service to help cut high shipping costs. To make up for this, they have increased the rates on economy services at a higher percentage than on their premium services.
The January 7, 2013 effective date is fast approaching and shippers won't have a lot of time to prepare themselves for the new rates. Many will struggle to find a way to balance the rate increases with their 2013 shipping budgets. Now is the time to start thinking about smart ways to save in other areas of your business so that your budget isn't crushed by the new increases in shipping.
- Residential delivery charge will increase by 6.6 percent
- Declared value charges for items over $100 will increase by 6.25 percent
- Address correction charge will increase by approximately 9 percent
- Delivery area surcharges will go up by 8.3 percent for residential and 7.5 percent for commercial
So while FedEx's general rate increase is the same as last year's at 5.9 percent (net increase of 3.9 percent when you factor in a 2 percent fuel surcharge reduction), many customers could see their rates go up as much as 10.5 percent depending on their shipping zone and level of service. And no one is immune to the inevitable fees and charges that arise from shipping errors and address changes.
Unfortunately, it may be the more cost-conscious shippers that are hardest hit by these increases. FedEx knows that more companies are opting for a lower level of service to help cut high shipping costs. To make up for this, they have increased the rates on economy services at a higher percentage than on their premium services.
The January 7, 2013 effective date is fast approaching and shippers won't have a lot of time to prepare themselves for the new rates. Many will struggle to find a way to balance the rate increases with their 2013 shipping budgets. Now is the time to start thinking about smart ways to save in other areas of your business so that your budget isn't crushed by the new increases in shipping.
About the Author:
Joseph B. Kappernick works with companies to help them reduce their logistics and shipping costs. Please visit NPI to learn more about shipping vendor expense management
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