Getting a handle on supply chain costs in the New Year.
Rates for shipping keep going up. And up.
While Christmas colors are supposed to be red and green, Brown and Purple seem to favor black and blue, once again hitting their customers with their by-now-traditional end of year rate bump. Even at this busy time in the shipping season, UPS and FedEx are managing to make one more holiday delivery – matching rate hikes.
Both UPS and FedEx are once again raising express and ground tariffs, each by an identical 4.9 percent. There is a difference, though – Brown’s rate hike is under the tree for Christmas, taking effect on Dec. 24, while Purple’s new rates will ring in with the New Year, kicking in on Jan. 1. After years of virtually nonexistent inflation in the base economy, the compounded rate increases of the package giants are striking – and the ones being struck are shippers. The only costs rising higher are medical expenses and tickets to see “Hamilton.”
Along with posted rate increases, backdoor hikes created by assessorial fees and especially dimensional pricing continue to add to shipping costs. In the LTL (less than truckload) space, increases from DIM weight pricing could quickly bump up LTL charges from seven percent to as much as 15 percent. Carriers started phasing in the system last summer, and soon all LTL operators will support charging dimensional pricing. Without a system to manage your shipping, you won’t even know the steps you could take to minimize your costs.
All of us at TOTALogistix wish you a very Merry Christmas, Happy Hanukkah, and a prosperous New Year. To help with that last one, and get a handle on your logistics costs, we’re offering this simple wish, a suggested New Year’s resolution: This year, I am going to put a TMS (Transportation Management System) in place, and finally take control of my supply chain.
Seriously – but not too seriously – Happy Holidays!