ProShip shares tips for dealing with the 2023 GRIs and a playlist to help you remember what to do

We are officially in the heart of peak season 2022 – has the madness started yet? Experts weren’t quite sure what to predict for this year’s peak, and the horizon to 2023 is still a little fuzzy. One thing that is clear – shippers won’t be getting a deal from FedEx and UPS this year. Both have released their General Rate Increases (GRI) for 2023: twinning at 6.9%. Before we look at the fun stuff (turn your speakers on now!), let’s look at the numbers.

National Carrier GRI Details

FedEx 2023 GRI

Effective January 2, 2023, FedEx Express (U.S., U.S. export, and U.S. import) package and freight standard list rates, and FedEx Ground standard list rates will increase an average of 6.9%. FedEx Freight rates will increase an average of 6.9%, applicable to the FXF PZONE, FXF EZONE, Offshore (includes FXF 300, FXF 303, FXF 352, and FXF 370 series) and FXF 1000 and FXF 501 rates will increase an average of 7.9%. [See all the details.]

UPS 2023 GRI

Effective December 27, 2022 (a week earlier than FedEx), rates for UPS Ground, UPS Air and International services will increase an average net 6.9%. In addition, the rates for UPS Air Freight within and between the U.S., Canada and Puerto Rico will increase an average net 6.2%. Other notable changes include an increase in late payment fees from 6% to 8% and shuffling of the zip code zone assignments. [See all the details.]

Birds of a Feather

While most analysts were predicting rate increases of at least 6%, this is the largest year-over-year increase by either national carrier ever. As usual, both announcements include text that reminds shippers that actual costs will vary according to your shipping profile characteristics and the terms of agreement which means, some shippers won’t see an increase at 6.9%. In fact, for most, it will be higher. 

Specifically, those who ship across longer zones will see higher increases. In addition, UPS continues to hike 3-Day Select rates, seeing anywhere from 6.9% to over 10% on larger packages across zones. Additional Handling surcharges are increasing anywhere from 11.5% to 18.75%, and Large Package Surcharges are significantly increasing as well.

Listening to Strategies for Surviving Rising Shipping Costs

Because we know chatting about shipping costs isn’t anyone’s favorite, we’ve put together a short playlist to help you remember what you need to do to prepare for the 2023 GRIs. These strategies will help keep your head above water amid rising costs due to inflation and now, shipping carriers.

The Man in the Mirror by Michael Jackson

Our first recommendation is to get to know your shipping profile better than you know yourself. Understand where and when your packages ship and how quickly your customers need their packages. Your shipping profile is extremely significant – and not only to you. Your carrier partners want to make sure that you understand your profile as well. And it’s also complex including service types, weights, dimensions, not to mention pick-up and delivery locations. 

Taking the time to assess the big picture of your profile helps you understand where you are so that you know where these new increases will take you. This lays the foundation for understanding how the increases will truly affect your business. When you position yourself to know as much about your shipping profile as your carrier, you are armed with your data so you can make your next move with your bottom line in mind.

The details are in the data. Need a way to dive into your data without drowning in it? A transportation business intelligence platform, anchored by multi-carrier shipping software, offers end-to-end visibility across your complete carrier network to see the trends driving your business and turn them into action that empowers your entire organization. [Learn more: myShipINFO]

With or Without You by U2

With purple and brown so well known, it may seem like other carriers are just on the sidelines. But in 2022, this is no longer the case. A multi-carrier strategy is the baseline for any shipper who wants to stay competitive in today’s market. Regional and alternative carriers are now sustainable and profitable options for shippers. 

While capacity constraints may not be a problem this year, finding competitive rates that don’t balloon your transportation spend will be. Leveraging additional carriers offers a wider array of services (think same-day or ship-from-store) that your competition could already be utilizing.

Once you’ve determined your carrier profile, you can identify the carrier partners that fit your business – benefiting both your org and the carrier. Finding the right balance between your carrier mix involves understanding the minimum spend amount required to receive your contractual incentives or discounts, as well as staying within the volume shipping thresholds set by the carrier. With these 2 factors, you should be both monitoring your service level (what’s their on-time performance, number of damage claims, etc.) and maintain the flexibility to pivot to a different carrier as needed if you need to based on those constraints, i.e. “carrier volume balancing”.

Finding this balance doesn’t need to be difficult. Your parcel shipping software is (or it should be!) aggregating and optimizing all the related shipping information (rates, labels, documents, etc.) to automate decision-making and make it easier for your supply chain to stay streamlined. A multi-carrier shipping solution with a broad carrier library amplifies your reach by offering customers more options to enhance their delivery experience. [Learn more: Why NRF Top Retailers Choose ProShip]

Don’t You (Forget About Me) by Simple Minds

As we are officially in 2022 peak season, now is the time to pay attention to everything and take notes. Documenting what went wrong and what went right this peak season weekly can start those conversations for determining what needs your program may have in the coming year. This can help identify the supply chain technology that can help solve any pain points. Performing this comprehensive post-mortem should include looking at each carrier, service, and surcharge to prepare for next year’s contract negotiations. Talking with vendors in Q1 will go much more smoothly if you have proof (hopefully with hard data) of what happened, so that you can separate what went right to continue doing it (call out those carrier wins) and what went wrong.

Wondering what you should be flagging? Listen to the experts and their partners! Check out this list of some of the top parcel shipping KPIs to monitor and take action on from Korber for where to start. This list includes:

  • Cost per Shipment
  • Service Level Utilization
  • Accessorials as a Percent of Total Spend
  • On-Time Performance
  • Supplier Performance

Bonus: Under Pressure by Queen and David Bowie

With the explosion of e-commerce brought on by the pandemic, online shopping doesn’t seem to be going anywhere, and neither do the major carriers. The key will be figuring out how you can utilize (or not utilize) their business to enhance your supply chain approach. Utilizing a solid multi-carrier shipping software solution to lead your strategy will set your brand up for shipping success in 2023 and for years to come – no matter the supply chain pressure.

Let’s talk shipping strategy for 2023 and beyond

Annual rate increases are just one of the many challenges retail/e-commerce, 3PL and manufacturing shippers face. Schedule a discovery call with a ProShip Shipping Expert to learn how ProShip multi-carrier shipping software can diversify your carrier mix to save money, avoid carrier capacity constraints and more.