3 LTL Freight Fees That Are Actually Worth Your Money

January 19, 2023 at 3:04 PMJen Deming
3 LTL Freight Fees that are actually worth your money blog title image

Keeping shipping costs low should be a goal for any LTL freight shipper, and is a smart tactic to successfully manage business expenses. What you may not know is that there are some scenarios where spending a little bit more can actually be beneficial. In certain cases, paying extra for an LTL freight fee may help avoid headaches, improve service, and create more efficiency. Let’s take a look at three scenarios where the fee is worth the extra cost.

Spend on: Freight Insurance

Probably the most important added fee that is worth the cost is extra freight insurance. The fact is that despite your best intentions (and packing procedures), your freight will at some point encounter damages and loss. Thinking that you’re safe with a claim payout from the carrier will lead to trouble. 

We hate to break it to you, but payouts are usually pretty low, and don’t often approach the actual value of your shipment. The process is slow, tedious, and complicated - it's very easy to make a misstep that can jeopardize the approval of the claim. If you do acquire approval, your payout is based on dollar per pound and freight class, which can complicate things. Lower freight classes typically have lower dollar per pound payouts, so a discrepancy between actual shipment value can make it challenging to recoup your losses. Other freight classes, especially those that include used items, may not be covered at all.

Freight insurance usually comes at nominal cost with major extra coverage. The payout is based on the actual value of your freight, and you won’t have the responsibility of proving that it was the carrier that caused damage to your shipment. You also won’t be so hard-pressed for time in submitting a claim, and your payout will be faster. A quality broker should offer options to add on insurance coverage to your loads. When requesting a quote, just make sure to mention that you’re interested in additional coverage - for a minimal fee, you should be protected.    

Spend on: Special Services

It’s always a smart idea to make sure your warehouse is well-stocked with proper loading equipment, and that your staff is adequately trained. But, sometimes you simply don’t have the resources. 

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Shipping locations without docks, small teams with low staff, and limited access businesses or special loads all warrant the extra money. Carriers offer a slew of extra services that cost money, but can be a life-saver depending on what you need to safely move your load. Liftgates, refrigerated trucks, and conestogas all fall into this category. You can also request driver assistance with loadings or delivery. While this isn’t a typical responsibility for the driver, if you’re willing to pay a little more, you can secure the extra help.

The most important thing about adding on these premium services is planning for the extra cost so that your invoice isn’t a surprise. Make sure you quote accurately, and include any additional options at the time of your request. If you’re unsure whether something may come with a hefty price tag, consult your broker or the carrier directly - especially since these services usually vary in cost across carriers.

Spend on: Carrier Appointments

Certain types of businesses require very specific shipping procedures and protocols. This happens often with high volume shippers that have trucks arriving all day long. These businesses frequently require appointments for delivery and pick-up. Grocers like Whole Foods or Trader Joe’s, and mass box stores such as Walmart and Target fit into these categories. Appointments help curtail truck pile-up and keep perishable goods stable. 

Some businesses are designated as limited access, and may also operate within restricted shipping hours, like schools, universities, prisons, churches, or construction sites. Appointments can help ensure arrivals fall within that open window and avoid unexpected deliveries that may disrupt business operations or cause scheduling issues. 

LTL fees to avoid

Neglecting to follow any business’s shipping and receiving protocols may result in a driver being sent away, which will likely incur missed appointment or redelivery fees. If you are shipping fresh produce and other perishable goods, any major delays are disastrous, resulting in damages to the load. Make sure you know whether or not your load will require appointments, and schedule them in a timely manner. Be extra mindful of any new locations you may be working with, and make sure any changes are communicated between all shipping parties. 

Don’t be afraid to spend when the circumstances are right

It’s important to be budget-minded, but the most successful shippers know when to shell out versus when to save. If you need freight insurance, special services, or appointments for arrival, it makes sense to pay just a bit more to ensure less headaches down the line. These extra services ultimately help your freight - but you need a plan. PartnerShip can help determine which “extras” make the most sense for your business.  

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3 Warning Signs Your Business Needs a Freight Broker

June 14, 2022 at 11:01 AMJen Deming
3 Warning Signs Your Business Needs a Freight Broker Blog Post

Managing your growing business can present some unique challenges. On one hand, orders are coming in, your sales are increasing, and your customer base is thriving. The flipside to that success, however, may mean new operational issues that eat up your time and bottom line.

Shipping freight successfully during this growth period is a stumbling block for many business owners and logistics teams. You may find yourself needing more time and a larger workforce – at some point you may even wonder whether it’s time to outsource help. A freight broker can help manage many of your freight challenges, from overarching issues like lowering costs to tackling day-to-day issues like ensuring delivery accuracy. The bottom line is that you shouldn’t be stressing out more than enjoying the success of your business. If you’re experiencing any of these three signs your business needs a freight broker, it’s time to get the help from the experts .

Warning Sign #1 – You are making big mistakes when shipping orders 

More sales is something to celebrate, but trying to keep up with the increase in orders without accommodating the volume is impossible. To make matters worse, packing and shipping is a very detail-oriented business, and rushing to get orders out quickly means an increased chance for error. There’s plenty of opportunity for mistakes that can snowball quickly. 

Issues such as labeling or paperwork inaccuracies or even quoting errors can quickly escalate and create major problems. For example, something as simple as a wrong address on your freight shipment can, at best, cause delays. That means inconvenienced and aggravated customers. If your customer is paying for shipping, and you’ve quoted the cost incorrectly, you can’t go back and ask for more money – that’s your loss. You need to make sure you’re quoting freight accurately the first time by using exact details and the correct classification.

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Mistakes like these cost you time and money, as well as customer satisfaction, which is pivotal when you’re a growing business. If you’re seeing shipping errors like those mentioned above, it’s definitely a sign that your business would benefit from a freight broker. A quality freight broker has a dedicated staff of freight experts who can help offer advice and resources on how to tackle the details that trip up many freight shippers. 

A great freight professional can help you avoid mistakes by assisting with every step of the freight shipping process:

  • Offer guidance on product classification and freight NMFC codes
  • Collect competitive and accurate quotes from carriers who fit your needs
  • Create necessary paperwork for delivery 

Warning Sign #2 – Your billing department is becoming overwhelmed

Unless you’re an established, larger-sized business, it’s likely that your employees are juggling several different responsibilities. It’s not uncommon for a business owner to be playing the part of shipping manager and billing specialist to boot. Being burnt out and behind schedule is a pretty clear warning sign your business needs some help from a freight broker.

When your business is growing, it’s safe to say your shipment volume is increasing, and you may even be shipping with several different carriers or using a variety of services. Managing all of these invoices can be overwhelming, especially when you’re checking for accuracy, meeting payment due dates, and processing claims.

A freight broker can help simplify the billing process for your freight shipments by acting as an extension of your own team. Most will offer consolidated invoicing which can help cut down on billing chaos. You’ll also benefit from auditing services to double check for errors and savings opportunities. Should you experience damages, your broker can act as your advocate and help navigate the very particular requirements for filing your claim. Relying on these services can help shoulder some of the responsibility that your business just may not have the time or resources to do thoroughly on its own.

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Warning Sign #3 – Your shipping costs are digging into your bottom line  

Let’s face it, running a business is expensive, and while more customers mean a greater chance at making a profit, it can also mean that your shipping budget needs to increase. Between packing materials, labor, and freight transportation, these expenses can multiply quickly. 

It’s key to make sure your freight rates make sense for your growing business. This can be done through carrier discounts and other means like order consolidation or taking a look at what types of LTL service providers work best for your business. Securing discounts and identifying savings opportunities can be challenging, especially if you’re not running a large corporation or shipping huge volumes of freight daily. 

The great news is that through established carrier relationships and collective buying power, working with a broker can give your business access to higher freight discounts that are typically reserved for higher volume shippers. A quality freight broker will also a conduct cost savings analysis for your business to see where you are overspending on both inbound and outbound shipments. Lastly, they can also quote and compare among carriers to make sure you’re getting competitive pricing to help combat the current freight market.

Let us help you

Everyone wants to see their business grow and succeed, but keep in mind that as you do, new challenges will arise along the way. If you’re encountering major freight shipping issues like quoting inaccuracies, invoicing headaches, or rising costs, managing on your own may have run its course. These mistakes are signs that working with a broker may benefit your business, and PartnerShip can help get you started.

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Freight Quote vs. Invoice: Why Don’t They Match?

August 13, 2021 at 9:25 AMJen Deming
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One of the most common questions we get is from customers wondering why the heck their final freight invoice doesn’t match the rate they were originally quoted. It’s a valid concern because once you have that bill, it’s next to impossible to get more money from your customer and you’re going to be eating that cost. Your knee-jerk reaction may be to blame the carrier, but the real reason they are different may sting a bit – it’s usually a shipper error. Before you start pointing fingers, review these common reasons your bill doesn’t match that original quote.

Reason 1: Your product is classed incorrectly 

One of the most common reasons a quote differs from a final bill is because your product is classed incorrectly.  With classification being a huge factor affecting your freight quote, even a small error can impact your price. If you guess or miscalculate, your class may be way off. 

The issue may be that sometimes your product is difficult to fit in a particular NMFC category. Take glass jars for example. This type of product falls under NMFC code 87700. It’s not as simple as that, however. Because glass jars are typically fragile, they are broken down by volume, and depending on that calculation, the class can be anywhere from class 65 to 400. In an average freight shipment, that’s a difference of hundreds of dollars. Make sure you are utilizing ClassIT, and consulting freight experts if you have any questions on class, or how to properly calculate density.

Reason 2: A liftgate service inflated your bill

When checking your freight quote vs. invoice, unexpected extra services are the second most common reason for a mismatch. One example we see time after time is for liftgate service. If you didn’t specify you would need a liftgate when you got your quote, but then your carrier provides the service at pick-up, it will cost you. Additionally, if your customer doesn’t communicate they need one for delivery, that can be added on without your approval or knowledge, surprising you once you get the bill. 

Communication between both parties and ensuring you have the proper equipment can avoid this completely. Make sure you both understand that the added cost of an accessorial may raise your rate, but will help your shipment get where it needs to. Understanding that these types of special trucks equipped with liftgates are not as common, both parties will know they need to be requested on the front-side.

Reason 3: Too much time has passed

First and foremost, it’s important to know that a freight quote is an estimate to begin with.

So many factors can change - for example, fuel costs fluctuate frequently. Additionally, depending on when you are scheduling your shipment, peak periods can cause capacity issues, and this generally results in higher charges.

As a general rule, we like to inform our customers that quotes for standard LTL service are valid for about a week. That window is even tighter when you’re using time-critical services. If you’re wanting an estimate so you know what to bill a customer, build in some room for your final cost, or requote as close to the actual shipment pick-up date as possible.

Reason 4: Your delivery location has changed 

While not quite as common, sometimes a change in delivery address can affect the final cost of your freight. Changes may occur after a load is quoted or may have to be made while the shipment is already in transit. Reasons for this might include a location being closed, or a consignee that isn’t ready to receive the shipment.

LTL freight shipments can be rerouted, but that adjustment will definitely incur costs: distance and fuel will increase if the location is further out. On top of that, special service fees such as a redelivery charge or even location-specific fees like limited access could also be applied. Do your best to requote if any details of your delivery location change. If the change is made at the request of your customer, be sure to communicate that fees will apply. If you want to absorb those charges as a courtesy, be sure to build some room in your customer cost to begin with. Otherwise, make it clear who is responsible for those fees.

Reason 5: The wrong carrier picked up your shipment  

You’d be surprised, but the wrong freight carrier picking up an LTL load happens much more often than you’d think. We’ve seen customers quote a general rate with one carrier and then hand it off to whatever carrier arrives that day just to get it on the road and off the dock.  Your shipping department is likely very busy, but this sort of simple mistake can cost you so much time and money in the long run.

Not every LTL carrier has the same base pricing, and even accessorial costs fluctuate between carriers.

If you quote with one carrier, and hand it off to another, you could be paying much more if that carrier charges more for their services. Even worse, if you have negotiated pricing with one carrier, the incorrect one won’t know to bill using your discounts. Worst case scenario, you may be billed at full-cost. Make sure your warehouse team is aware of what carriers are to move which loads. Creating color coded carrier labels and marking your shipments can help ensure a quick once-over to avoid this drama completely.

Reason 6: You have a paperwork error that affects billing 

When comparing your freight quote to your invoice, also take a look at your paperwork and shipping documents. Billing errors and missing information can create an expensive and exhausting headache.

If you are arranging a shipment, and have special pricing or are using a third-party, make sure an accurate BOL states the correct carrier and “bill-to” party. If you are receiving the load, but responsible for the shipping arrangements, don’t leave it to the shipper to create the BOL. In doing so, you run the risk of an incorrect billing party or other inaccuracies that mean your discounts won’t be applied. Even after the fact, a letter of authorization (LOA) can sometimes fix this by informing a carrier of the correct billing party, but it’s not guaranteed and it definitely delays the process.

Final thoughts 

Don’t freak out if you’re seeing some discrepancies between your freight quote vs. your invoice. While they can be unexpected and troublesome, educating yourself and your customer about what can change your rate can help you make better decisions when planning your LTL load. Strong communication and a plan of action can help mitigate expensive invoice issues. If you have concerns about your freight quote vs. your invoice, PartnerShip can help dodge the guessing, help choose the correct services based on your shipping needs, and side-step costly errors.

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How Small Retailers Can Save on Shipping Without Volume Discounts

August 12, 2021 at 1:42 PMJen Deming

Small businesses have it tough, and the fact that volume shipping discounts aren’t always an option makes shipping expensive. The good news is that small retailers have options to decrease shipping expenses without having to rely on volume discounts. Check out our helpful video to learn how. 




5 Times The Lowest Freight Quote Won't Work For You

July 8, 2021 at 1:50 PMJen Deming
If you're keeping LTL costs low by shopping for great freight rates, you're doing a pretty good job of shipping smarter. But here's a curveball: there's a few specific scenarios where the lowest quote might do more harm than good for your load. Our newest video covers five key instances where you may want to rethink that cheap quote and pay just a bit more for better service. 


5 Painless Ways to Save on Freight

March 12, 2021 at 11:55 AMJen Deming

Everybody wants to lower their business operating costs, but nobody wants to spend a lot of time doing it. Decreasing your shipping spend is a good place to start, and there are five painless ways shippers can keep their freight costs low. From auditing your current carriers to tightening up your packaging practices, we break down simple ways to spend less on freight using minimal effort while gaining maximum payoff.



Common Accessorial Fees Explained

February 24, 2021 at 11:31 AMLeah Palnik

No one likes surprise fees. Unfortunately, there are quite a few extra costs that are likely to pop up with LTL freight. Known as accessorial fees, these charges cover a wide variety of extra services and can add up fast.

What are accessorial fees?
An accessorial fee is a charge for services performed by the carrier that are considered to be beyond the standard pickup and delivery. These fees make up just one part of your freight rate, but can be challenging to manage. Understanding which accessorial charges you can plan for and which ones you can avoid is necessary if you want to keep your freight costs in check.

What are some common LTL accessorial charges?
You might be wondering what is considered an extra service, and you’re not alone. We’ve compiled some common LTL accessorial fees so you know what to look out for.

  • Lift Gate Service
    When the shipping or receiving address does not have a loading dock, manual loading or unloading is necessary. A lift gate is a platform at the back of certain trucks that can raise and lower a shipment from the ground to the truck. Having this feature on trucks requires additional investment by an LTL carrier, hence the additional fee.

  • Inside Pick Up/Inside Delivery
    If the driver is required to go inside (beyond the front door or loading dock) to pick up or deliver your shipment, instead of remaining at the dock or truck, additional fees will be charged because of the additional driver time needed for this service.

  • Residential Service
    Carriers define a business zone as a location that opens and closes to the public at set times every day. If you are a business located in a residential zone (among personal homes or dwellings), or are shipping to or from a residence, the carrier may charge an additional residential fee due to complexity in navigating these non-business areas.

  • Collect On Delivery (COD)
    A shipment for which the transportation provider is responsible for collecting the sale price of the goods shipped before delivery. The additional administration required for this type of shipment necessitates an additional fee to cover the carrier's cost.

  • Oversized Freight
    Shipments containing articles greater than or equal to twelve feet in length. Since these shipments take up more floor space on the trailer, additional fees often apply.

  • Fuel Surcharge
    An extra charge imposed by the carriers due to the excessive costs for diesel gas. The charge is a percentage that is normally based upon the Diesel Fuel Index by the U.S. Energy Information Administration.

  • Advance Notification
    This fee is charged when the carrier is required to notify the consignee before making a delivery.

  • Limited Access Pickup or Delivery
    This fee covers the additional costs required to make pickups or deliveries at locations with limited access such as schools, military bases, prisons, or government buildings.

  • Reweigh and Reclassification
    Since weight and freight class determine shipment base rates, carriers want to make sure the information on the BOL is accurate. If the carrier inspects a shipment and it does not match what was listed, they will charge this fee along with the difference.

Navigating the many nuances of LTL freight accessorial fees to determine which services you need and which you can avoid will help ensure the most cost effective price. Carriers generally publish a document called the "Rules Tariff 100" which provides a list of current accessorial services and fees. The shipping experts at PartnerShip are well versed in these documents and are happy to help with any questions you may have. 

Want a more in-depth look into freight accessorial fees and how to avoid or offset the added costs? Check out our free white paper

The Complete Guide to Freight Accessorials

The Essential Guide to the 2021 FedEx and UPS Rate Increases

December 8, 2020 at 10:52 AMLeah Palnik
The Essential Guide to the 2021 FedEx and UPS Rate Increases

It’s been a wild and unpredictable year, but there’s one thing you can count on as we head into 2021 – the annual FedEx and UPS rate increases. For the fourth year in a row, both carriers announced an average increase of 4.9% for air and ground parcel services. The new rates for UPS will go into effect on December 27, while the new rates for FedEx will go into effect a week later on January 4.

How to budget your parcel costs for 2021
While it may be tempting to budget for a 4.9% increase, you have to dig a little deeper to uncover how much your costs will actually go up in 2021. The actual rate increases vary quite a bit depending on the service you use and your package characteristics.

Both carriers have made the new rates for 2021 available:

You will also need to account for updates to FedEx and UPS surcharges. Common surcharges like Residential Delivery and Address Correction will be more expensive in the new year. But on top of that, FedEx and UPS have both made changes that could cause a package to incur a fee that it wouldn’t have in the past. For example, they both broadened the qualifications for their Additional Handling fee and have updated the list of zip codes for Delivery Area surcharges.

You can view a complete list of the changes that the carriers have each posted:

How to analyze the 2021 FedEx and UPS rate increases
While it’s imperative for you to be aware of the changes coming ahead in the new year, combing through every detail of the new rate charts is challenging and time-consuming. A good place to start is to identify the changes that will have the most significant impact on your budget. First, take a look at your shipments from the last year and identify trends for the services you typically use, your package characteristics, and zip codes. From there you can use the new report from PartnerShip, which highlights the areas with the highest increases and outlines the important changes.

The state of the parcel industry
Aside from the general rate increases, it’s important to understand what’s happening within the parcel industry. Within the past several months, the coronavirus pandemic has brought on a great deal of logistical challenges. Carrier networks have been strained as they struggle to keep up with demand and deal with restrictions. As a result, both FedEx and UPS have instituted peak surcharges.

Most notably, since the beginning of the pandemic FedEx and UPS have been applying peak surcharges to international shipments. Air cargo capacity has been limited which has disrupted the global supply chain and driven costs up.

Additionally, residential deliveries have increased substantially as more people are relying on online shopping. High-volume B2C shippers specifically have been ramping up their business. FedEx and UPS have responded to this increased demand by instituting peak surcharges. Instead of simply applying a surcharge on all residential shipments during the holiday season like they’ve done in the past, UPS and FedEx are applying it to those shippers with a large volume of packages or those who are experiencing a significant increase. That’s good news for many small businesses, but tough on those larger ecommerce retailers.

Even if these peak surcharges don’t apply to your business right now, it doesn’t mean that you’ll forever be immune. There are still a lot of unknowns related to the coronavirus pandemic and how it will continue to impact the supply chain. You will need to stay vigilant and keep up to date on announcements from FedEx and UPS.

What you can do to combat rising shipping costs
With everything the industry is experiencing right now, shippers don’t exactly hold the power. Add the general rate increases on top of that, and you may feel helpless against rising costs. However, there are things you can do to mitigate the damages. Download our guide to the 2021 FedEx and UPS rate increases to help identify the problem areas. Then contact PartnerShip to find out if you qualify for one of our discount shipping programs, and we'll help you ship smarter.

Download the essential guide to the 2021 FedEx and UPS Rate Increases

A Practical Guide to Parcel Shipping Rates

April 23, 2020 at 10:44 AMLeah Palnik
A Practical Guide to Parcel Shipping Rates

The ever-rising cost of parcel shipping is a hot topic. FedEx and UPS raise their rates regularly and find clever, new ways to recoup costs. The changes aren’t always clear and can catch shippers by surprise. However, if you have a solid understanding of what determines small package rates and what to look out for, you’ll be in a good position to manage your costs.

How parcel shipping rates are determined

  • Weight. No surprise here, but how much your shipment weighs plays a large part in how much it will cost to ship. If you take a look at the service guides for UPS and FedEx, you’ll notice that the heavier the package, the higher the rate.
  • Dimensions. You can’t look at just the weight alone. In fact, your package dimensions could cause your shipment to be rated at a higher weight, thanks to what is known as dimensional (DIM) weight pricing. Carriers use this to ensure you’re paying for the space that your shipment takes up in their delivery vehicles. Larger packages take up more room, leaving less space for other deliveries. To avoid this increase in your parcel shipping costs, it’s imperative that you’re efficient with your packaging.
  • Service. If you need your shipment to get to its destination sooner rather than later, you’re going to pay for it. Air services that offer delivery overnight or next day will cost you the most. In comparison, if you can plan for some extra time, using a ground service will save you.
  • Distance. Your origin and destination ZIP codes play a big part in determining your rate. The farther your shipment needs to travel, the more you’ll pay. This is based on groups of ZIP codes that parcel carriers refer to as zones.
  • Fuel. This is a tricky one to put your finger on because both UPS and FedEx will make adjustments on a weekly basis based on information published by the U.S. Energy Information Administration (EIA). The surcharge is a percentage and applies to the base rate, as well as a number of accessorial charges.
  • Surcharges. Based on your shipment’s characteristics, you can be hit with additional fees known as accessorials or surcharges. These fees are assessed for things like residential deliveries, additional handling, and oversized dimensions. The best thing you can do is educate yourself on the common fees so you can budget for the unavoidable ones or make some changes to avoid the ones you can.
  • Discounts. Not every account is created equal. You may be able to secure discounts directly with your carrier if you have significant volume. For everyone else, you can get discounts by working with a third-party like PartnerShip.

The history of FedEx and UPS rate changes
At the end of every year, FedEx and UPS both announce a general rate increase (GRI). In recent history, it has been an average increase of 4.9%. However, that is only an average – meaning that some rates will actually increase by more or less based on service and package characteristics. Throughout the year, keep track of the type of parcel shipments you process – the services you’re using, the weight and dimensions, and zip codes. That way you’ll be able to focus on determining the rate increases that will affect you the most when the time comes. This information can be overwhelming to go through, so get help where you can. PartnerShip publishes a guide to the rate increases every year that can be a great resource for when you’re planning your budget.

Changes to parcel shipping costs to look out for
It’s hard to predict exactly what changes FedEx and UPS will make to their rates, but it’s important to note that they don’t leave them untouched outside of the GRI. In fact, over the past few years they have been making more changes throughout the year. These changes tend to affect surcharges rather than the base rates. Not only how much they’ll cost you, but also how they’re defined. For instance, FedEx and UPS recently lowered the weight threshold for the Additional Handling fee. That means that more packages will get dinged with that surcharge. Obviously this isn’t a rate increase, but it’s a way that your costs could increase.

FedEx and UPS also make changes based on long-term industry trends, seasonal demand, or unforeseen changes in the market. When their networks are strained the most, FedEx and UPS are bound to react. For example, during past peak holiday seasons when online orders are known to be at an all-time high, UPS instituted a surcharge for residential shipments. And most recently, during the COVID-19 pandemic, FedEx and UPS instituted a temporary surcharge on international shipments due to air cargo capacity being limited.

The bottom line on parcel shipping
Understanding all of the factors that make up your parcel rates is the first step to uncovering opportunities to cut your costs. Along with having that solid foundation of knowledge, keep a good record of your parcel shipments and their details so you can accurately forecast your needs and make adjustments. Lastly, stay on top of the latest updates from FedEx and UPS by reviewing their published changes and signing up for service alerts.

You don’t have to navigate these changes alone. PartnerShip provides resources to help you make sense of parcel shipping rates and can help you cut your costs. Contact us to get started.

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2020 FedEx and UPS Rates Explained

December 10, 2019 at 1:29 PMLeah Palnik
2020 FedEx and UPS Rate Increases Explained

UPS and FedEx rates are slated to go up in 2020 by an average of 4.9%. The changes will go in effect for UPS on December 29, while the FedEx rates go into place on January 6.

If you’re planning to budget for your costs to go up 4.9% in the next year, you better think twice. The announced average doesn’t paint a complete picture. The rates for some packages will be increasing less than 4.9%, but that means that the cost to ship other packages is increasing far more. What you’re shipping, where you’re shipping it to, and what service you’re using will ultimately determine how much you should budget for your shipping costs in the new year.

Here are the released rates for 2020:

FedEx and UPS surcharges
The rates, however, are only one part of the equation. You also have to take into account the additional fees that UPS and FedEx tack on. It’s more important than ever to be mindful of what could qualify your packages for these surcharges. Not only do the costs increase year over year, but the carriers also make adjustments to how the charges are defined – making it more likely that your packages will be hit with them.

A prime example of this is the change both FedEx and UPS made to their Additional Handling fee for 2020. They’ve lowered the weight threshold to 50 pounds from 70 pounds, which means your costs could go up significantly if you ship packages within that window.

Here are all of the announced surcharge changes:

Industry trends
Online shopping has had a profound effect on the parcel industry and the way that FedEx and UPS operate. The carriers are moving more residential deliveries and an increased amount of larger packages, as consumers have become accustomed to being able to order almost anything online and receiving it in 2 days or less.

The changes FedEx and UPS have instituted in recent years and are making in 2020 are a direct response to these industry trends. In the past several years, they’ve broadened the use of dimensional weight pricing, added new peak surcharges, and drastically increased the surcharges for larger packages.

Understanding the 2020 rate increases
We know how daunting it is to analyze the 2020 FedEx and UPS rates, so we’ve done the hard work for you. In our free white paper, we break down the new rate charts and simplify some of the complicated changes. It’s the best way to find out what will cost you the most in the year ahead. Looking for ways to offset the rate increases? We can also help with that. Contact us to find out if you qualify for one of our discount shipping programs.

Download the free white paper: Your Guide to the 2020 FedEx and UPS Rate Increases