Wow! You have reviewed the impact of the recent FedEx and UPS announcements about dimensional weight pricing haven’t you? While we appreciate our carriers and their challenges, and appreciate the staff they have working with us, this change in pricing will have dramatic impacts on many of our clients and programs. Unless you are shipping bricks, this may impact you materially.
Of course all the big shippers are working on renegotiating rates. It’s not like UPS and FedEx didn’t know the package profile of their big shippers and costed to it already. This all smells like an over-reaction to Amazon and a few other similar companies that were casual with their box size selection and believe in/promote magic shipping during the holiday crunch. The rest of us are casualties of the fall out of this nuclear business war.
My first piece of advice is to UPS and FedEx. Let Amazon deliver their own packages. Now. You know that’s where they are going (as least with their good freight). Get out of that bed. Don’t spend your capital supporting these folks. Don’t feed the beast that is scheming against you and blowing up your assets during peak shipping periods.
Now on to reality and my second piece of advice. Review your shipping profile now. Right now. Don’t wait. Review your SKUs, product packaging, shipping packaging, AND shipping methods. Of course this is also the implicit message from the big 2: give us the same or more shipment in less cube. It’s a reasonable request, just one that most of us have met already and they have priced in already.
Finally, we can only control what we can control. IDS is actively reviewing the profiles of our clients shipments to see if we have missed anything in terms of box size used in shipping, but it’s not like our clients did not expect this before but only to save $0.15 cents a shipment, not avoid a $2.00 or more “penalty”. We are also helping our clients review their product offerings. We are helping them gather data to use in their own negotiations (for the few that don’t use our accounts). And we are accelerating some clients’ transition to our USPS consolidation program offerings (DHL, OSM). We are fighting back.
Please call IDS today if you want to investigate our order fulfillment solutions and our UPS, DHL, OSM, and Purolator Courier options for shipping.
But don’t wait to act on reviewing this action by FedEx and UPS. It is very material to a very high percentage of programs.