The Current State of Freight: What You Can Expect

August 31, 2021 at 10:05 AMLeah Palnik

To say the freight market is strained right now might be an understatement. If you’ve experienced significantly higher rates and less reliability from your carriers, you’re not alone. As someone who is shipping freight, it’s critical to keep your finger on the pulse of what’s happening in the market in order to navigate the challenges that are coming with it. Let’s break down the factors that have led us here and what we can expect moving forward.

Key factors that have led to challenges in the transportation industry
Like so many other industries, freight transportation has been rocked by the COVID-19 pandemic and all of the cultural shifts that have come along with it. The pandemic not only created new challenges, but also exasperated existing pain points in the market – leading to the perfect storm. It all boils down to a case of supply vs. demand.

  • Consumer buying is strong and is driving up demand. While the world was locked down, we weren’t spending money on vacations or going out to eat. In many cases those spending dollars went towards buying goods instead. Retailers are doing what they can to keep up with demand and as a result, have an increased need for trucks to deliver their much needed inventory.
  • There is a truck driver shortage. The driver shortage is old news, but it is still very relevant now. Sometimes there just simply aren’t enough drivers available to take on new loads. For years, there have been more drivers retiring and leaving the profession than there have been new drivers entering the market. Unfortunately, the open road hasn’t been as attractive to this generation of the workforce as it once was.
  • Building new tractors are constrained by parts availability. Not only is it hard to move freight with less available drivers, but now we are also seeing a limit on new trucks on the road. Supply chains for many goods have been seriously disrupted thanks to the pandemic, and parts that are needed to build new tractors are no exception.

How LTL carriers are responding
With such volatile market conditions, LTL carriers are forced to respond. As no surprise, a major course of action they’ve taken is to increase rates. Simple economics tells us that an increased demand means they can charge more for their services.

Not only are they increasing rates, but they’re also looking to shed less desirable freight from their networks. Loads deemed less profitable, or more trouble than they’re worth, are harder to get covered because carriers want to prioritize loads that allow them to work efficiently and profitably.

Missed pickups, declined freight, and temporary terminal embargos have now become common place and plague freight carriers across the country, regardless of the company name and logo on the side of the truck.

LTL freight observations from the front lines
Many of our customers are exhausted dealing with carrier issues. In a survey we conducted earlier this year, 78% of respondents cited rising shipping costs as a challenge they were currently facing. Along with that, 47% noted they were experiencing longer transit times and 36% were dealing with poor carrier performance.

Freight shipping challenges

Our team has also noticed several concerning trends pop up with freight carriers. As if raising base rates wasn’t enough, we’ve seen them put in extra effort to collect on everything they can. Accessorial fees that you may not have seen on your bill in the past are now showing up for services you’ve always received. The carriers just aren’t as lax as they may have been in the past for charging for these extra services.

Because freight networks are so strained, we’re also seeing an uptick in missing shipments. If this has happened to you, you know how stressful it can be. The carriers are also doing everything in their power to deny claims for both missing and damaged shipments. They’re wanting to see them filed sooner than ever before and are requiring a great deal of evidence.

Estimated transit times for LTL freight has never been guaranteed, but now more than ever, we’re seeing shipments miss that predicted window. Unfortunately, longer transit times and missed pick-ups are becoming extremely prevalent, again due to how ill equipped carriers are to meet the current freight demand.

The quickly recovering economy is creating a new environment, in which all industries are competing for freight capacity and causing a new set of standards. Some shippers may be shocked by new carrier practices - from new fees to increased pickup and delivery times.

What can you do?
You may want to live by the old adage about how you can’t change others, only yourself. It’s not within your power to control carrier performance or consumer demand, but you can educate yourself and act accordingly.

  • Use a quality broker, like PartnerShip. While brokers have no control over what a carrier ultimately does with a shipment, a quality freight broker will provide the communication and creative solutions you need when caught up in an issue.
  • Follow the tried-and-true best practices for overcoming capacity challenges. Expand your current carrier network, build in extra time at every step of the shipping process, consolidate your shipments, and consider alternative services. While it’s not always possible to implement these strategies, following them any time the market is experiencing tight capacity can be very advantageous to your operations.
  • Become a shipper of choice. This means making your freight desirable to carriers. You probably aren’t able to change what you’re shipping, but there are some factors you can control. Being flexible with pick-up and delivery times, ensuring ease of access for the truck, and avoiding long detention times are all things carriers ultimately appreciate.

The widely reported driver shortage is very real, but it is only part of the challenge. Capacity is increasing, but not as quickly as the demand grows. Organizations that can adjust and plan accordingly will do a great deal to minimize disruptions in their supply chain.

Moving forward
Back to school season is upon us and the holidays are right around the corner. In short, demand is not expected to drop anytime soon. Will the supply side be able to catch up? Not likely. Recruiting and retaining the needed labor force will continue to be one of the biggest challenges in the industry. And as we enter hurricane season and another COVID-19 surge, we could see even more network disruptions.

At this point, it’s important to manage expectations. You’ll want to budget for higher freight costs and be mindful of potential delays, so you’re not caught off guard. For everything in-between, our team has the expertise to help you navigate these challenges. Contact PartnerShip today and lean on us when you need it most.

Your No-Nonsense Guide to Dimensional Weight Pricing

June 28, 2021 at 11:23 AMLeah Palnik

If you regularly ship with UPS or FedEx, you’ve likely encountered dimensional (DIM) weight pricing whether you realized it or not. Essentially it’s a way for the carriers to charge you more for larger, but lighter, packages. And if you’re not careful, it can drive up your costs significantly.

What is dimensional weight pricing?
Dimensional weight pricing is a way to rate your packages based on density in relation to weight. What that means is that instead of rating your package purely based on its actual weight, it also takes into account how much space your package takes up on the carriers’ delivery vehicles.

How do you calculate dimensional weight pricing?
Luckily for you, we have a DIM weight calculator you can use. But if you’re curious about the formula behind it, it’s fairly simple. Start by calculating the cubic size of your package – multiply length by width by height. Then take that total and divide it by 139, which is the dimensional divisor determined by FedEx and UPS. If the resulting DIM weight is higher than your actual weight, the DIM weight becomes the weight you’ll be rated on – otherwise known as your billable weight.

DIM Weight Calculation

Let’s look at a couple simple examples. If you have a 12x12x12 box, the dimensional weight will be 12 lbs. So if you’re shipping 15 lbs. of books, your package will be rated based on the actual weight of 15 lbs. But if you’re shipping 5 lbs. of ping pong balls, your package will be rated based on the DIM weight of 12 lbs. since it’s the higher weight.

Why is dimensional weight pricing used?
UPS and FedEx want to discourage shippers from using unnecessarily large packaging, and there is one main reason for this. The larger your package is, the more space it occupies on their planes and trucks. This in turn, leaves less room for other packages. UPS and FedEx make more money and work far more efficiently if they’re able to fill up their delivery vehicles with more packages.

The history of dimensional weight pricing
Once upon a time, not all shipments were subject to DIM weight pricing. The DIM factor that FedEx and UPS use has also changed over time – and not in a way that’s favorable to shippers. While the DIM weight formula and shipment qualifications have remained steady for a few years now, there’s no guarantee that it’ll stay that way. Let this be a lesson on how important it is to stay alert on any announced changes from both carriers.

How do you avoid overpaying due to dimensional weight pricing?
The most important thing you should be doing to avoid DIM weight pricing is right-sizing your packaging. You need to consider both the size of the item you’re shipping and also how fragile it is. Items that are at a greater risk of damage will need more cushioning, which will take up more space. Try to find packaging that allows enough room for the needed cushioning, but no more. The smaller you can make your package, while still keeping your item safe, the better.

There are a few resources available that you can use to find the right packaging for the items you’re shipping. UPS has a Packaging Advisor tool on their website that allows you to select your merchandise category and enter your dimensions to get customized packaging and cushioning guidelines.

FedEx also has a number of packaging guides based on the type of item you’re shipping. But beyond that, FedEx even has a Packaging Lab where you can send your packaging in for durability testing or request a design consultation to improve the efficiency of your packaging. Many of the services are free if you have an account.

Keeping your small package costs low
While ensuring you have efficient packaging to avoid DIM weight pricing is one way to help reduce your shipping costs, another is securing discounts with the carriers. That can be difficult for small and medium sized businesses to negotiate on their own. However, when you work with PartnerShip you can access savings that are typically reserved for high volume shippers. Contact our team to learn more.

DIM Weight Infographic

Pallet Packing Mistakes to Avoid

June 10, 2021 at 10:21 AMLeah Palnik
Pallet Packing: Common Mistakes to Avoid

Pallet packing isn’t something you can take lightly. One wrong move and the whole shipment could lose strength and stability – risking damage to your freight. Rather than conducting your own experiments, check out these common pallet packing mistakes so you know what to avoid.

Mistake #1: Choosing the wrong pallet
Pallet packing begins at the very foundation of your shipment – the pallet itself. It may be tempting to reuse old pallets for your shipments but if you’re not looking out for structural integrity, you could be in trouble. Avoid using pallets with broken boards or protruding nail heads.

Using an alternative material pallet can also cause some issues. Wooden pallets are the standard, but pallets made from metal, plastic, and corrugated materials have all entered the market. However, not all pallets are created equal. These pallets are good alternatives for certain specialized needs, but issues like weight, movement, and pallet strength make them not suitable for all types of freight. Before you consider swaying from wooden pallets, make sure to do your research.

Mistake #2: Not properly packing individual boxes
Before you can stack your pallet, you need to pack your individual boxes or cartons. Even if your boxes are secure on the pallet, the contents inside the cartons can shift. Leaving excess space and not providing proper impact protection is a common mistake that many shippers make. Start by right-sizing your boxes – leave just enough room for the product and the needed impact protection. Anything more is wasted space that you will need to fill with cushioning like paper pad or packing peanuts.

Mistake #3: Stacking inadequately
You may think that the way you stack your cartons is just about making it fit on your pallet. However, neglecting to follow certain best practices that increase strength can be a fatal mistake. During pallet packing, not evenly distributing weight and not placing the heaviest boxes at the bottom is a quick way to increase your risk of damage. Using pallets that are too small and thus leaving overhang is also a common mistake that will make your freight vulnerable.

The stacking patterns you use when packing your pallet are also extremely important. One of the biggest offenders is pyramid stacking. This kind of pallet packing pattern leaves the cartons at the top at greater risk of being damaged and makes the load less secure. When possible, an aligned column pattern is best. Stacking your pallet in a way that ensures it is level and flat will put you in the best position to avoid damage.

Mistake #4: Skimping on stretch wrap
If you don’t currently use a stretch wrap machine, you want to make sure your manual wrapping technique is up to par. There are a couple common mistakes to look out for. First, make sure you’re wrapping around the pallet enough. You should be making at least 5 wraps around the entire shipment. Second, twisting the wrap is something that is often overlooked. You should twist the wrap every other rotation to increase the durability.

Mistake #5: Not labeling correctly
After you go through all that work of ensuring you’ve packed your pallet in a way that reduces its risk of damage, you don’t want to run into issues just because you neglected to label your shipment properly. One label is not enough. You want to make sure the shipping label is on each side of your pallet, with the consignee information clearly visible.

Pallet packing may seem simple, but these missteps can create complicated issues. If you’ve discovered that you’ve made any of these common mistakes and want to learn more about packaging best practices, download our free white paper!

The Ultimate Guide to Packaging Your Shipments

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

Asset vs. Non-Asset Based 3PLs: The Major Distinctions

January 21, 2021 at 10:16 AMLeah Palnik

There are two main types of third-party logistics (3PL) providers and they’re not exactly created equal. Asset based 3PLs and non-asset based 3PLs each have their place in the market. However, they have a few key differences that can impact how your freight is handled and how much it will cost you.

What are asset based 3PLs and non-asset based 3PLs?
Asset based logistics providers own some or all of the parts of the supply chain. This can include carriers, trucks, warehouses, or distribution centers. Conversely, non-asset based 3PLs don’t own these parts of the supply chain. Instead they are relationship-based and develop a network of partners to help move your freight.

The major differences between asset based and non-asset based logistics
Besides how they operate, there are some distinctions that are important for shippers to take note of.

  1. Flexibility and ability to offer custom solutions
    Since asset based 3PLs have their own carriers, those are the carriers they will rely on to move your freight. Their carriers likely specialize in specific lanes or services or may only have a presence in one part of the country. If those specializations match up with your specific needs, it could be a great partnership. However, if they don’t or if your needs vary, you likely won’t be receiving the most efficient or cost-effective service.

    On the other hand, non-asset based logistics providers have a wider network. They have access to multiple carriers which allows them to source the one that most closely aligns with your needs. That flexibility allows them to offer more customized solutions for your freight.

  2. Level of control over the supply chain
    Asset based 3PLs have more control over the supply chain because they own the assets that comprise it. What that results in is the ability to set their own pricing more easily because they don’t have to negotiate with an outside party. Asset based 3PLs also have more direct control over carrier issues and errors. They can implement changes with their carriers that non-asset based 3PLs simply can’t.

    Non-asset based 3PLs have less control, especially when it comes to what the carrier does. That’s because there are more hands involved with moving your freight. However, a quality broker will know what to look for to prevent issues and will have high standards for the carriers it keeps in its network.

  3. The underlying interests of the 3PL 
    It’s hard to argue that asset based 3PLs aren’t inherently biased. They own their own warehouses and trucks, so it’s obviously in their best interest to have shippers use them over others.

    The interests of a non-asset based 3PL are more in line with the shipper than the carrier. The best brokers will work on your behalf to find discrepancies in your invoices, provide claims assistance, and use their expertise to help you ship more efficiently.

How to decide between an asset based 3PL and a non-asset based 3PL
The type of 3PL that is best for you will largely depend on your specific needs. In general, you want to make sure you are working with a broker that can get you access to capacity when you need it most. From there, you should evaluate the typical characteristics of your freight so you can find a 3PL that is closely aligned.

No matter the situation, you need to work with a quality broker that is dedicated to finding you the freight solutions you need. PartnerShip is a non-asset based 3PL with an extensive network of alliances designed to help you ship smarter. Contact us to learn how you can save on your freight and improve your operations.

Contact us today!

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

Eco-Friendly Shipping is Possible with a SmartWay Partner

October 16, 2020 at 2:30 PMLeah Palnik
PartnerShip is a SmartWay Transport Partner

If you are concerned with the environmental impact throughout your freight shipping supply chain, there are options for eco-friendly shipping.  

The SmartWay Transport Partnership is a collaboration between the U.S. Environmental Protection Agency (EPA) and the freight industry and is designed to improve and streamline shipping operations so they use less fuel and generate less pollution.

Launched in 2004, the SmartWay Partnership is a voluntary public-private program that:

·        provides a system for tracking, documenting and sharing information about fuel use and freight emissions

·        helps companies identify and select more efficient freight carriers and operational strategies to improve supply chain sustainability and lower costs from freight movement

·        reduces freight transportation-related climate change and air pollutant emissions

In our ongoing effort to be an environmentally responsible freight shipping broker, PartnerShip is pleased to announce that it has once again been named a SmartWay Logistics Company Partner, for the fourth consecutive year. That means that we manage logistics in an environmentally responsible way and help reduce the environmental impact from freight transportation.   

The EPA is celebrating its 50th anniversary this year and there has been a lot of progress in the transportation industry. From NOx standards to fuel efficiency programs, these efforts have made a significant difference. Since its launch, the SmartWay program has helped partners avoid emitting 134 million tons of air pollution (NOx, PM, and CO2) and saved 280 million barrels of oil, which is the equivalent of eliminating annual electricity use in over 18 million homes.  

EPA 50th anniversarysource: https://www.epa.gov/smartway/smartway-timeline

More and more customers are making their shipping decisions based on responsible environmental performance, and being a SmartWay Partner means that we place a high value on sustainability and efficiency, just like they do. PartnerShip is proud to be an eco-friendly freight broker.

If you’ve been looking for an environmentally friendly shipping company, contact PartnerShip. We can provide you with eco-friendly shipping options. Contact us at 800-599-2902 or get a quote now!

5 Crucial Holiday Shipping Strategies for Ecommerce Sellers

October 9, 2020 at 11:27 AMLeah Palnik
Get Control of Your Holiday Shipments

As a consumer, it might feel like it’s too soon to start thinking about the holidays, but retailers know that waiting is not an option. If you’re an ecommerce seller, you’ve probably already been stocking up your inventory and preparing for the increase in traffic to your site. As you’re getting ready for this busy time of year, keep these crucial holiday shipping strategies in mind.

  1. Reduce your parcel rates
    Shipping orders to your customers can get expensive, fast. While some of the big players in ecommerce can negotiate discounted rates directly with FedEx and UPS, that doesn’t mean that the smaller sellers have to suffer. If you belong to a trade association or a chamber of commerce, check out their member benefits. Many groups offer parcel discounts with UPS or FedEx that are included as part of your membership.

  2. Consider on-demand warehousing options
    If you don’t need year-round warehouse space, but your orders ramp up significantly during the holiday season, consider using on-demand warehousing. This can help alleviate the pressure on your existing operations, in a time when it’s crucial that everything runs smoothly. A key part of this strategy is also the added ability to reach your customers sooner. It’s no secret that meeting customer expectations for deliveries is essential to your business, and with the right warehousing partner, you’ll be able to reduce transit times and gain access to cost-effective expedited services.

  3. Clearly communicate shipping deadlines
    There are some of us who are guilty of waiting until the last minute to do their holiday shopping. When’s the last day to order for Christmas? Do you offer expedited options or any special seasonal guarantees that could give you a leg up over the competition? Managing customer expectations for holiday shipping will increase your customer satisfaction. Clearly communicate this information on your website, during the purchasing process, and in emails to your subscribers.

  4. Consider special promotions
    Now is the time to pull out all the stops to maximize your sales. People are looking to buy, and it’s your job to incentivize them to spend their hard earned dollars on your site. According to a report by the National Retail Federation, 50% of shoppers cited a limited-time sale or promotion as the reason they were swayed to purchase an item they were on the fence about.

    Even more notable, 64% of shoppers said that free shipping has influenced them to make a purchase. Offering free shipping has become the new normal in the world of ecommerce. If you’re worried about the costs of “free shipping” there are several different strategies you could try. For example, try setting the free shipping threshold above your average order amount to increase the amount people spend when making a purchase on your site. When executed properly, consumers will be more likely to add items to their cart to meet the minimum and it becomes a win-win.

  5. Set up a streamlined returns process
    With increased holiday sales comes the inevitable – returns. According to a Narvar Consumer Report, 74% of customers said return shipping fees will prevent them from making a purchase. On the flip side, 72% said that a “no questions asked” return policy would make them more likely to buy from a retailer. The influence of the return policy on the purchase decision is undeniable. Make your return policy as customer friendly as possible and communicate it clearly at the beginning of the shopping experience. Also, take proactive steps like providing return labels in the original order and offering in-store returns so it is less of a headache for you and your customers.

Striking a balance between appealing customer promotions and the right holiday shipping strategies can help make your season bright. If you need to reduce your parcel costs or could use some help with storage and fulfillment, PartnerShip has you covered. Our shipping and warehousing services set ecommerce sellers up for success. Contact us today to learn how you can ship smarter.

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How to Package Parcel Shipments Cost Effectively

June 30, 2020 at 12:59 PMLeah Palnik

When evaluating ways to lower your shipping costs, you don't want to overlook the impact that packaging has on your bottom line. In fact, there are a few high cost culprits that may surprise you. Learn how to package your parcel shipments more cost effectively with these 4 simple tips.


Looking for an intro into the fundamentals of proper packaging? We have the ultimate guide.

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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