DC Velocity - December 2012

The tariff increases announced by FedEx, which take effect Jan. 6., will be adjusted for a 2-percent reduction in fuel surcharges. At press time, the Memphis, Tenn.-based company had not announced rate changes for its ground parcel or home delivery services. Nor had it announced changes for the operation it conducts jointly with the U.S. Postal Service (USPS).

PAYING MORE FOR FUEL

Gerard Hempstead, who runs an Orlando, Fla.-based parcel consulting company, calculated that UPS’s minimum charge will rise by 5. 38 percent, adding that even those shippers with discounted pricing programs will have to bear all of that increase. UPS customers “need to plan and budget for at least [a 5.38- percent increase] and not be lulled” by the pronouncements of lower rates made in the company’s press release, Hempstead said.

According to Hempstead, the parcel giants have been engaged for years in some nifty sleight-of-hand in calculating their respective fuel surcharges. Hempstead said the companies “bake” about 1 to 2 percent of their fuel surcharges into their base rates, depending on the type of service. As a result, despite the purported surcharge reductions announced by the carriers, shippers are actually paying more for fuel because the charges are being levied from base rates that escalate every year, Hempstead said.

Those who closely follow the parcel industry say the flurry of rate increases from both companies reflects the immense power the near-duopoly enjoys over the business-to-business segment. DHL Express had served as the low-price competitor and a key check on FedEx and UPS, but it left the U.S. market in January 2009 after sustaining billions of dollars in losses over six years. Meanwhile, the USPS focuses its formidable resources on the business-to-consumer delivery segment, and regional parcel carriers currently lack the technology and geographic reach to give businesses the coverage they need.

UPS and FedEx know this, parcel consultants say, and they are striking while the iron is hot. The 2013 price changes are not the first time, nor will they likely be the last.

“I’m predicting a great 2013 for UPS,” says Hempstead. ;

—Mark Solomon

accolades

Hytrol Conveyor Co. Inc. has presented nine employees with its Tower of Strength award in recognition of 40 consecutive years of service. The recipients are Hershel Williams, Tommy Holmes, Larrie Woodard, James Williams, Lennis McClure, Jimmy Becker, Jerry West, Ron Johnson, and Mike Millsap. …

LLamasoft Inc., a global provider of supply chain design software, has been ranked 216 on Deloitte’s Technology “Fast 500” list, which ranks the 500 fastest-growing technology, media, telecommunications, life sciences, and clean technology companies in North America. … Nissan Forklift Corp. has recognized New England Industrial Truck Inc. (NEIT) as the Nissan dealer with the most consecutive Gold Service Excellence Program honors. NEIT, headquartered in Woburn, Mass., has achieved gold-level honors for 17 consecutive years. … Averitt Express has received the Tennessee Trucking Association’s

2012 Fleet Safety Award for less-than-truckload carriers with more than 15 million miles. The company has also been named Less-Than-Truckload Carrier of the Year by Parker Hannifin for the second straight year. … Wynright Corp., a provider of intelligent material handling systems, has earned the new Certified Robot Integrator designation from the Robotic Industries Association (RIA). … Ruan Transportation Management Systems has received the 2012 SmartWay Excellence Award from the U.S. Environmental Protection Agency. … Crown Equipment Corp. has earned Ceva’s Americas Supplier of the Year award. … The Transportation Intermediaries Association (TIA) has presented Salt Lake City-based England Logistics with the 2012 TIA 3PL Samaritan Award for donating service hours and more than $500,000 to local charities and groups. … G.I. Jobs, a career guide for veterans, named Union Pacific Railroad one of the United States’ top military-friendly employers for 2013, marking the 10th time in 11 years the railroad has earned that distinction. … Herman Miller Inc. has received the Reusable Packaging Association’s first annual Excellence in Reusable Packaging Award. Herman Miller won the award for an initiative that saved the company $46,000 annually in material and labor, and eliminated 24,645 pounds of corrugated per year. … The Columbus & Greenville Railway was named Shortline of the Year at the BNSF Railway’s annual Shortline Conference. … Hitchcock Fleming & Associates Inc. and storage product manufacturer Akro-Mils have been honored by the Web Marketing Association for their work on Akro-Mils’ new website: www.akro-mils.com.