to Help You Control Rising Carrier Rates in 2022

If your business is feeling the gut-punch of 2022’s increased shipping rates, you’re not alone. Merchants across the country are struggling to adjust, and many feel powerless in their ability to manage not only higher shipping costs, but the logistics of zone changes, size and weight limits, and accessorial costs.

Fortunately, there are ways to alleviate the impact on your bottom line.  “Solutions exist to help you take control of shipping costs and manage logistics,” says Ken Wood, President of LJM Group.  “The first step is to understand key changes in 2022 and the specific ways they affect your business.  Then you can effectively implement the solutions that are available.”

First, let’s take a proactive look at the key increases made by FedEx and UPS to identify areas that impact your business. Then become empowered with parcel management solutions that are proven to help reduce shipping costs, manage logistics, and boost profits.

FedEx
Average 5.9% increase for FedEx Express, FedEx Ground, FedEx Home Delivery, and FedEx Freight.
Pay attention to increases of 6.9% to 13.3% for specific zones, delivery type, and size!

• Ground services (including Ground Economy):
  • +7.5% average for parcels 2-5 lbs. in Zones 2-8
  • Minimum package charge (1 lb. / Zone 2): + $8.76 to $9.36
• FedEx Ground Economy (formerly SmartPost): + 6.9% average
  • Residential delivery will be affected most
  • New Delivery & Returns Surcharge
• NEW:  No Shipment Tendered Surcharge 
• NEW:  International Out-of-Delivery-Area and International Out-of-Pickup-Area Surcharges
• NEW: Surcharges for Additional Handling and Oversize Packages – Expect new tiered pricing based on zone, instead of flat rate. Affects US Express and US Ground.
  • Dangerous Goods/Hazardous Materials: + 12%
  • Delivery Area Surcharge: + 8% – 10.25%
  • Large Package: + 9% – 13.3%
  • Residential Surcharge: + 6% – 8.6%
• NEW Peak Surcharges
  • $0.60 per package on residential Ground and Express, with volume criteria.
  • $1.00 per package on Ground Economy, no volume criteria.

Get full FedEx 2022 rate info

UPS
Average increase of 5.9% across all UPS services. Take note of high surcharges of 6% to 13.3%.

• Delivery Surcharges: Be aware of zone changes that affect Delivery Area and Extended Delivery Area surcharges
  • Delivery Area Surcharge: + 8% – 10.25%
  • Residential Surcharge: + 6% – 8.6%
  • Remote Area Surcharge: Added with Delivery and Extended Delivery Area charges
  • Collect on Delivery (COD) Fee: + 5.8% 
• Surcharges for Additional Handling: + 5% to 13% 
• Surcharge for Large Package: + 9% – 13.3%
• Dangerous Goods/Hazardous Materials: + 12%
• Increased SurePost rates: See changes by zone.

Get full UPS 2022 rate info

Read the LJM Exclusive: Gavin Creado Unravels UPS 2022 Rate Increases

TOP SOLUTIONS
The numbers alone can be overwhelming. Thankfully, there are ways to gain leverage on the percentages and best of all, solutions to gain control of rising costs and master your shipping logistics.

NEGOTIATE (or Re-negotiate) More Often
You can automatically reduce rates and improve terms by negotiating a contract with your shipping Carrier. Merchants who negotiate on their own likely receive standard industry discounts with some improvements and enhancements, but better pricing is definitely available when working with a professional negotiator. LJM Group negotiates hundreds of contracts a year, and their clients realize savings—as much as 30%, as opposed to the standard 3% to 6% savings that most businesses negotiate on their own.

AUDIT to Get Every Refund and Benefit You Deserve
Just as you’re struggling to adjust to the multitude of changes in rates and fees, so are the Carriers. Their errors will increase, and the predicted flux in fuel costs throughout the year will lead to further errors.

Establish an audit system to actively monitor Carrier invoices and ensure that you catch all overcharges, errors, and delayed shipments (click here for a comprehensive Audit Checklist). Be sure to include a process for prompt filing of refund claims, and regularly check that all service level guarantees under your contract are being honored.

Audits reports are also critical when it comes to managing your shipments. These reports can demonstrate ways to improve delivery speed, overall operations, and profitability.  You’ll get the data you need to strategically address wasted spending and find the most cost-effective options based on parcel variables and your shipping profile.

THINK Outside the Shipping Box
Oversized, heavy, and odd-sized boxes are being hit with some of the highest surcharges in 2022. Consider flat-rate shipping options. It pays to be innovative and open to intelligent shipping options. Review your products, streamline your packaging, and switch gears if needed. Shipping rate increases are a result of many factors, from the pandemic and supply chain disruptions to changes in consumer shopping preferences.

COLLABORATE with Customers and Experts
How do you reassure and retain customers who are also feeling the pain of increased shipping rates?  Let them know that you’re taking aggressive steps to keep costs down and service up.  Communicate the proactive things you’re doing to keep their experience the best it can be. –