On this week’s episode of Check Call, Scott Lord, senior vice president of parcel at Redwood Logistics, joins host Mary O’Connell of FreightWaves to dive into all things parcel.
Key quotes from Lord:
“What shippers need to understand is that, while the announced increases have been 4.9%, 5.9% and now a record 6.9%, the real increases are in fact closer to 10%-plus. The somewhat hidden, or not publicized might be a better word, factor would be surcharges. Many years the increases to surcharges is greater than the published base rate increases.”
“Sometimes there are new surcharges that replace existing ones. Like in 2021, UPS added a Remote Area Surcharge that replaced the existing Delivery Area and Delivery Area Extended surcharges. That new surcharge lifted the published rate from a range of $3.10-$3.25 for the old surcharge to a whopping $12 for the new one.”
“I would suggest, at a minimum, that shippers should allocate an additional 2-4% above the stated rate increases for their parcel transportation budgets. Shippers can ask their carrier representative to lay out for them the impacts of the rate increase for their shipping characteristics. If all else fails, shippers can work with a reputable shipping consultancy to help demystify the rate increase impacts.”
“If I am shipping premium, overnight services, are my packages being delivered on time? If not, I should be filing refund claims or considering moving my shipments to a lower-cost service.
Shippers can also partner with a reputable consulting firm that can assist with evaluating their carrier reliability as the data shippers get from the carrier are typically the stats for packages that qualify for the guarantees rather than what I call the ‘no excuses’ view — which is all packages delivered on time, regardless of carrier business rules.”
Got any pain points or things you wish were better in the supply chain and the world of transportation? Contact O’Connell to be on a future episode of Check Call.