With the end of the year fast approaching, be prepared because your shipping costs are about to go up! But just how bad will the increase in shipping costs actually be? FedEx recently announced its rate increases for 2013 for both Domestic and International Express services and you should be prepared for an even larger increase than seen in 2012. The following is a small list of rate increases that will likely affect your shipping budget:
- Residential delivery charge will increase by 6.6 percent
- Declared value charges for items over $100 will go up by 6.25 percent
- Address correction charges will go up by about 9 percent
- Delivery area surcharges will go up by 8.3 percent for residential and 7.5 percent for commercial
While FedEx's general rate increase remains the same as last year's at 5.9 percent (with a net increase of 3.9 percent when you factor in a 2 percent fuel surcharge reduction), many customers could see an increase in their rates as much at 10.5 percent depending on their shipping zone and level of service. And no one is immune to the inevitable fees and charges that arise from shipping errors and address changes.
Unfortunately, it may be the more cost-conscious shippers that are hit hardest by these rate increases. FedEx understands that more companies are opting for lower levels of service to help cut their high shipping costs. To make up for this decrease in service levels, FedEX has increased their rates on economy services at a much higher percentage than on their premium services.
The January 7, 2013 effective date is fast approaching and shippers won't have a lot of time to prepare themselves for the new rates. Many will struggle to find a way to balance the rate increases with their 2013 shipping budgets. Now is the time to start thinking about smart ways to save in other areas of your business so that your budget isn't crushed by the new increases in shipping.
- Residential delivery charge will increase by 6.6 percent
- Declared value charges for items over $100 will go up by 6.25 percent
- Address correction charges will go up by about 9 percent
- Delivery area surcharges will go up by 8.3 percent for residential and 7.5 percent for commercial
While FedEx's general rate increase remains the same as last year's at 5.9 percent (with a net increase of 3.9 percent when you factor in a 2 percent fuel surcharge reduction), many customers could see an increase in their rates as much at 10.5 percent depending on their shipping zone and level of service. And no one is immune to the inevitable fees and charges that arise from shipping errors and address changes.
Unfortunately, it may be the more cost-conscious shippers that are hit hardest by these rate increases. FedEx understands that more companies are opting for lower levels of service to help cut their high shipping costs. To make up for this decrease in service levels, FedEX has increased their rates on economy services at a much higher percentage than on their premium services.
The January 7, 2013 effective date is fast approaching and shippers won't have a lot of time to prepare themselves for the new rates. Many will struggle to find a way to balance the rate increases with their 2013 shipping budgets. Now is the time to start thinking about smart ways to save in other areas of your business so that your budget isn't crushed by the new increases in shipping.
About the Author:
Joseph B. Kappernick works with companies to help them reduce their logistics and shipping costs. Please visit NPI to learn more about shipping vendor cost optimization
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