20 DC VELOCITY NOVEMBER 2014 www.dcvelocity.com
Parcel shippers could be excused if they had a feeling of déjà
vu upon hearing about UPS Inc.’s planned tariff rate hikes
for 2015.
That’s because Atlanta-based UPS followed the lead of its
chief rival, FedEx Corp., by raising its published rates by an
average of 4. 9 percent across its domestic and international
product lines, effective Dec. 29. And as with FedEx, the UPS
increases will vary depending on the weight of a parcel and
the distance it travels.
For example, the rate for shipping a parcel weighing
between one and 10 pounds will increase by 6. 2 percent,
according to data from Shipware LLC, a consultancy.
Rates on parcels that weigh between 11 and 20 pounds will
increase by 5. 7 percent, while the rate for a package weighing between 21 and 30 pounds will climb by 5. 3 percent,
according to Shipware data.
By contrast, the rate hikes on parcels weighing 31 pounds
and higher will fall below the average increase, according to
Shipware. The rate for a shipment weighing between 71 and
100 pounds will increase by just 1. 9 percent.
UPS will also raise its “minimum” charge for ground
packages by 5. 9 percent to $6.61 from $6.24. A minimum
charge is typically assessed on a one-pound package moving
under 150 miles.
Packages that move via UPS’s air service, most of which
weigh less than 50 pounds, will incur significantly higher
rate increases than what is shown on the tariff, according to
Rob Martinez, Shipware’s president and CEO.
The weight of the average package is about four pounds,
though the weight varies depending on the nature of the
transaction involved. E-commerce packages mostly bound
for residences are generally lighter than shipments moving
in a business-to-business (B2B) transaction.
As with UPS, the tariff rates on lighter-weight shipments
carried by FedEx Ground, FedEx’s ground parcel unit, will
exceed the unit’s average tariff increase. The typical FedEx
Although the adjustments between the two
carriers are roughly the same, the UPS increases
will have a wider impact because UPS handles far
more ground parcels than FedEx.
GOING “DIM”
As previously reported, FedEx and UPS will
change their pricing of ground parcels measuring
three cubic feet or less by rating them by their
size instead of their weight. Currently, shippers
of lightweight, bulky parcels qualify for a low rate
even though their goods cube out aboard a delivery van before they weigh out.
The carriers have said the change will enable
fairer and more accurate pricing of their capacity.
It will also benefit shippers by enabling them to
cut back on excess packaging, which will improve
efficiencies and reduce their operations’ environmental impact, the companies said. However,
many customers could be faced with double-digit
rate increases unless they shrink their packages’
dimensions.
The new dimensional pricing will affect between
35 and 50 percent of all UPS domestic ground
packages, according to Shipware data. The increases are expected to fall hardest on B2C shippers
because most residential packages measure less
than three cubic feet, the consultancy said.
—M.S.
UPS’s 2015 rate hikes have a familiar ring to them
William Schmidt, assistant professor of operations at Cornell
University, received the Council of Supply Chain Management
Professionals’ 2014 Doctoral Dissertation Award for his
research titled Supply Chain Disruptions and the Role of
Information Asymmetry. … Apptricity, a developer of mobile
enterprise software, received a notable mention in Gartner’s
“Magic Quadrant for Warehouse Management Systems”
report. … Peco Pallet’s depot in Hazleton, Pa., has been certified by the Safe Quality Food Institute for Level 2 Hazard
Analysis and Critical Control Points (HACCP)-Based Food
Safety Plans. … Holland Storage Systems, parent company of
SpeedCell Storage Solutions, has received a patent for its track
shelving system. … Ryder System Inc., a provider of commercial fleet management and supply chain solutions, was recognized as a finalist in the 2014 Southwest Oil & Gas Awards,
which are given to companies that are leaders in their fields.
… Unishippers Global Logistics LLC, a small-package and
freight shipping reseller, was recently named one of the top
50 companies to work for in Utah by the Deseret News. …
The Hebron, Ky., DC run by iHerb, an e-commerce company
that sells vitamins, supplements, and other health products,
has earned certification from NSF International as a Good
Manufacturing Practices (GMP) facility. … Toyota Material
Handling, U.S.A., Inc. presented ProLift Industrial Equipment
with its Aftersales Service Evaluation and Certification award
for implementing a global quality program at the dealership.
accolades
