Carrier Rate Change 2013

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UPS FedEx and the USPS are taking rates up in 2013

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Carrier Rate Change 2013

  1. 1. 2013 Carrier Price Changes
  2. 2. It’s that time again !!!!!!!!NOTE DIFFERENTEFECTIVE DATES
  3. 3. Increases are not linear By Service Type or by Weight In confusion there is profit or By Zone% inc rt vs lft Zone 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8 % inc rt vs lftZone 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8 Letter 5.60% 5.59% 5.56% 5.52% 5.65% 5.61% 5.53% Letter 6.67% 6.58% 7.46% 7.46% 7.41% 7.50% 7.34% 1 5.13% 5.16% 6.45% 6.39% 6.42% 6.41% 6.43% 1 5.85% 5.88% 6.88% 6.98% 6.90% 6.92% 6.95% 2 5.03% 5.86% 6.41% 6.40% 6.43% 6.45% 6.46% 2 5.97% 5.93% 6.99% 6.88% 6.95% 6.99% 6.91% 3 5.05% 5.04% 6.41% 6.44% 6.49% 6.44% 6.46% 3 5.79% 5.94% 7.00% 6.95% 6.94% 7.00% 6.95% 4 5.05% 5.05% 6.48% 6.49% 6.49% 6.45% 6.50% 4 5.81% 5.57% 6.98% 6.92% 6.96% 6.94% 7.00% 5 5.34% 5.01% 4.01% 4.03% 4.05% 4.06% 6.49% 5 4.59% 4.52% 4.07% 6.99% 6.93% 6.98% 6.98% 6 7 Priority 5.15% 5.12% 6.44% 6.46% 6.46% 6.48% 6.46% 5.08% 5.08% 4.07% 4.03% 6.48% 6.44% 6.46% 6 7 Standard4.55% 5.89% 6.98% 6.97% 6.93% 6.97% 6.97% 5.81% 5.92% 6.94% 6.95% 6.96% 6.96% 6.99% 8 Overnight 5.03% 5.07% 4.03% 6.48% 6.46% 5.34% 6.46% 8Overnight 5.90% 5.89% 6.99% 6.96% 6.98% 6.95% 6.95% 9 5.12% 5.03% 6.43% 6.45% 4.03% 4.05% 6.48% 9 4.55% 5.90% 6.98% 6.94% 6.95% 6.94% 7.00% 10 5.41% 5.24% 4.05% 4.04% 4.14% 4.15% 6.09% 10 4.66% 5.93% 6.96% 6.98% 6.97% 6.96% 6.99%% inc rt vs lft Zone 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8 Letter 7.44% 7.26% 7.36% 6.87% 6.79% 6.77% 6.92% 1 7.40% 7.29% 7.37% 6.87% 6.82% 6.79% 6.93% 2 6.86% 7.08% 7.28% 6.73% 6.91% 6.78% 6.94% 3 7.32% 7.26% 7.19% 6.73% 6.87% 6.83% 7.00% 4 7.46% 7.43% 7.36% 6.77% 6.85% 6.85% 6.96% 5 7.23% 7.17% 7.34% 6.78% 7.01% 6.94% 6.85% 6 7.32% 7.28% 7.33% 6.82% 6.90% 6.91% 6.92% 7 2 Day nd 7.41% 7.24% 7.25% 6.83% 6.92% 7.00% 6.88% 2nd Day 8 9 AM 7.46% 7.19% 7.24% 6.97% 6.98% 6.90% 6.93% 7.36% 7.47% 7.37% 6.97% 6.99% 6.94% 6.90% 10 7.36% 7.29% 7.50% 6.98% 6.95% 6.94% 6.96%
  4. 4. Your Business is not linear By Service Type There areservices that can or by Weight Knowing your business is crucialbuild a model for you or By Zone Weight/Zone 2 3 4 5 6 7 8 Weight/Zone 2 3 4 5 6 7 8 Letter 7 2 9 35 7 4 2 Letter 2 11 22 57 17 18 1 1 17 10 23 81 11 36 2 1 12 18 21 143 47 47 4 2 9 14 17 76 6 16 2 2 14 32 37 167 26 39 6 3 20 14 21 132 31 52 5 3 10 35 80 296 55 107 17 4 10 4 6 25 9 9 1 4 3 15 27 59 22 29 11 5 13 9 8 73 21 26 5 14 29 29 140 34 39 3 6 7 Priority 5 6 7 3 7 6 32 30 12 8 7 11 2 1 6 7 Standard4 7 12 4 9 11 99 47 24 9 27 22 10 8 8 9 Overnight 2 4 1 1 5 4 19 19 6 3 3 13 2 8 9 Overnight 3 2 12 4 8 11 31 43 14 11 21 14 4 2 10 4 1 5 31 8 11 3 10 3 7 9 62 6 20 8 Weight/Zone 2 3 4 5 6 7 8 Weight/Zone 2 3 4 5 6 7 8 Letter 2 3 2 26 14 15 2 1 971 861 1028 3896 639 957 64 1 17 32 42 260 53 130 3 2 735 658 814 3205 555 781 42 2 20 27 41 237 46 74 1 3 481 427 519 2025 384 544 63 3 24 41 54 405 96 229 18 4 306 314 375 1420 278 407 62 4 4 15 22 86 35 57 3 5 431 411 484 1974 348 529 65 5 23 45 41 247 45 98 9 6 246 246 275 1143 213 300 80 6 15 19 35 141 38 65 12 7 277 300 335 1227 222 331 45 8 9 Ground 235 176 182 184 267 275 960 958 178 474 300 267 61 44 7 8 2nd Day11 11 14 11 16 16 126 75 27 16 43 31 4 9 9 9 14 14 68 18 33 8 10 189 177 212 827 143 277 56 10 11 19 21 91 18 36 6
  5. 5. Don’t assume the carriers have the same base rates Carrier Year Carrier Year Service Level 1 Service Level 1 Minimum Charge: 0.00 Minimum Charge: 0.00 Fuel Surchare: 0.00% Fuel Surchare: 0.00% Weight Discounts Zone 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8 Weight Discounts one 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8 Z Letter 0.00% Letter 0.00% 1 0.00% 12.25 12.30 12.35 12.45 14.15 14.75 16.50 1 0.00% 7.50 8.65 9.30 10.65 13.35 14.75 15.55 2 0.00% 12.35 12.40 12.45 12.55 15.15 16.40 19.20 2 0.00% 7.70 9.10 10.00 11.80 15.15 16.40 18.25 3 0.00% 12.90 13.10 13.80 13.85 17.55 18.40 21.70 3 0.00% 8.40 9.60 10.95 13.10 17.55 18.40 20.85 4 0.00% 13.00 13.55 14.70 15.60 19.45 21.00 24.80 4 0.00% 9.25 10.60 11.65 14.70 19.45 21.00 23.10 5 0.00% 13.10 14.15 15.50 17.05 22.05 23.15 27.80 5 0.00% 9.85 11.35 12.75 16.05 21.65 23.15 25.45 6 0.00% 14.30 15.45 17.70 19.10 24.60 25.75 31.55 6 0.00% 10.45 12.40 14.00 17.60 23.35 25.75 27.95 7 0.00% 14.40 16.95 19.10 20.50 27.30 29.10 34.65 7 0.00% 10.80 13.40 15.10 18.80 25.30 28.55 30.70 8 0.00% 15.10 18.50 20.60 22.05 30.00 31.85 37.85 8 0.00% 11.35 14.45 16.30 20.10 27.45 30.60 33.50 9 0.00% 15.80 19.15 21.95 23.80 32.15 34.95 40.75 9 0.00% 12.05 15.35 17.35 21.35 29.45 32.70 36.10 10 0.00% 15.90 19.25 23.15 25.60 34.15 37.60 43.95 10 0.00% 12.75 16.00 18.30 22.80 30.95 35.00 38.70 • Generally UPS Next Day is 3% less • Next Day Air Saver 2% • 2day AM 3% • 2 day 3% • 3 day 13%
  6. 6. MINIMUM CREEP Minimum January FuelYEAR Charge Y/O/Y Increase % Surcharge Net $2005 $3.622006 $3.80 4.97%2007 $4.00 5.26% 3.75% $4.152008 $4.20 5.00% 6.25% $4.462009 $4.57 8.81% 4.75% $4.792010 $4.84 5.91% 5% $5.082011 $5.17 6.81% 6.50% $5.512012 $5.49 6.19% 8% $5.932013 $5.84 6.38% Est 7.5% $6.28 49.33% 73.48% 61% v 2005
  7. 7. Minimums Do I really have a discount at all? Minimum Charge: 0.00 Fuel Surcharge: 0.00%Many contracts are set Weight Discounts Zone 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8so that no discounts Letter 0.00% will drop below the 1 30.00% 4.09 4.36 4.49 4.68 4.90 4.96 5.05 rate of a 2 30.00% 4.45 4.74 5.13 5.24 5.52 5.59 5.79 3 30.00% 4.52 4.95 5.40 5.57 5.85 5.99 6.39 Zone 2, 1 LB charge 4 30.00% 4.62 5.08 5.67 5.93 6.15 6.38 6.86 5 30.00% 4.75 5.13 5.89 6.17 6.38 6.65 7.22 6 30.00% 4.87 5.29 5.99 6.31 6.50 6.85 7.39 7 30.00% 5.09 5.43 6.09 6.45 6.68 7.03 7.60 8 30.00% 5.28 5.56 6.25 6.57 6.88 7.26 7.97 9 30.00% 5.38 5.69 6.34 6.69 7.03 7.64 8.46 10 30.00% 5.56 5.71 6.44 6.87 7.32 8.16 9.02 New Minimum is $5.84 before the fuel surcharge
  8. 8. Minimums Do I really have a discount at all? Minimum Charge: 5.84 Fuel Surcharge: 0.00%Many contracts are set Weight Discounts Zone 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8 Letter 0.00% so that no discounts 1 30.00% 5.84 5.84 5.84 5.84 5.84 5.84 5.84 will drop below the 2 30.00% 5.84 5.84 5.84 5.84 5.84 5.84 5.84 rate of a package 3 30.00% 5.84 5.84 5.84 5.84 5.85 5.99 6.39below the Zone 2, 1 LB 4 30.00% 5.84 5.84 5.84 5.93 6.15 6.38 6.86 charge 5 30.00% 5.84 5.84 5.89 6.17 6.38 6.65 7.22 6 30.00% 5.84 5.84 5.99 6.31 6.50 6.85 7.39 7 30.00% 5.84 5.84 6.09 6.45 6.68 7.03 7.60Example: Given a 30% 8 30.00% 5.84 5.84 6.25 6.57 6.88 7.26 7.97 discount, the cells in 9 30.00% 5.84 5.84 6.34 6.69 7.03 7.64 8.46red would not receive 10 30.00% 5.84 5.84 6.44 6.87 7.32 8.16 9.02the any or only some of the discount
  9. 9. Minimums Do I really have a discount at all? % inc rt vs lftZone 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8 LetterMany contracts are set 1 5.88% 5.88% 5.88% 5.88% 5.88% 5.88% 5.88% so that no discounts 2 5.88% 5.88% 5.88% 5.88% 5.88% 5.88% 5.88% will drop below the 3 5.88% 5.88% 5.88% 5.88% 6.10% 7.73% 7.42% rate of a package 4 5.88% 5.88% 5.88% 7.50% 8.42% 7.81% 7.67%below the Zone 2, 1 LB 5 5.88% 5.88% 6.86% 8.40% 8.08% 7.70% 7.68% charge 6 5.88% 5.88% 8.14% 8.31% 8.42% 7.68% 7.59% 7 5.88% 5.88% 7.98% 8.10% 8.28% 7.80% 7.25% 8 5.88% 5.88% 8.00% 8.05% 8.24% 6.63% 6.36%Look how much your 9 5.88% 5.88% 7.87% 7.65% 8.39% 6.57% 6.40%rates are going up in 10 5.88% 5.88% 7.61% 7.65% 8.24% 6.58% 6.39% the weights where most of your shipments fall This includes the benefit if the fuel surcharge does in fact go to 7.5% in January Note to self: Ask for no minimum or lower minimum
  10. 10. There is a compounding of all these baked in fuel surchargesUPS Sets 2009 RatesAtlanta, October 17, 2008 UPS Sets 2010 RatesNew Pricing Takes Effect Jan. 5, 2009 UPS (NYSE:UPS) today released new list rates Atlanta, November 20, 2009for 2009, including an average increase of 5.9 percent for UPS Ground packages and New Pricing, Fuel Surcharge Calculations Will Take Effect on Jan. 4, 2010an average net increase of 4.9 percent on all air express and U.S. origin Internationalshipments. UPS (NYSE:UPS) today released new list rates for 2010, including an average increase of 4.9 percent for UPS Ground packages and an average net increase of 4.9 percent on all air express and U.S. origin internationalUPS Freight announced a general rate increase of 5.9% for 2009. shipments.The rate increase for air express and international shipments is based on a 6.9 percent The rate increase for air express and international shipments is based on a 6.9 percent increase in the base rate, less a 2increase in the base rate, less a 2 percent reduction in the air and international fuel percent reduction in the air and international fuel surcharge index.surcharge index.UPS Sets 2011 Rates UPS Sets 2012 Rates Atlanta, November 18, 2011Atlanta, November 01, 2010 New Pricing Takes Effect Jan. 2, 2012New Pricing To Take Effect Jan. 3, 2011 UPS (NYSE: UPS) today released new published rates for 2012, including a net increase of 4.9 percent for UPSUPS (NYSE:UPS) today released new published rates for 2011, including a net increase of 4.9 percent for UPS Ground packages and a net increase of 4.9 percent on all UPS Air services and U.S.-origin international shipments.ground packages and a net increase of 4.9 percent on all air express and U.S. origin international shipments. The rate increase for UPS Ground shipments is based on a 5.9 percent increase in the base rate, less a 1 percentage pointThe rate increase for UPS ground shipments is based on a 5.9 percent increase in the base rate, less a 1 percent reduction reduction to the index-based ground fuel surcharge. The rate increase for UPS Air and international services shipments isto the index-based ground fuel surcharge. The rate increase for air express and international shipments is based on a 6.9 based on a 6.9 percent increase in the base rate, less a 2 percentage point reduction to the index-based air andpercent increase in the base rate, less a 2 percent reduction to the index-based air and international fuel surcharge. international fuel surcharge. In effect your firm may be paying 25% in fuel surcharges
  11. 11. FUELRun that by me again about how theCarrier bakes in some of the fuel surcharge into the base rate Ground Air FedEx 2010 2011 2012 2010 2011 2012 UPS Jan 5.00% 5.50% 8.00% 7.00% 9.00% 13.00% 12.50% Feb 5.00% 6.00% 7.50% 6.50% 10.00% 11.50% 11.50% Mar 5.50% 6.50% 7.50% 7.50% 11.00% 13.00% 11.50% Apr 5.00% 7.50% 8.00% 7.00% 13.00% 14.00% 14.00% May 5.50% 8.50% 8.50% 8.50% 15.50% 14.50% 14.50% Jun 6.00% 9.50% 8.50% 10.00% 16.50% 14.50% 14.50% Jul 6.00% 9.50% 8.00% 8.00% 15.00% 12.00% 12.00% Aug 5.50% 9.00% 7.00% 7.50% 15.00% 10.00% 10.00% Sept 5.50% 8,5% 7.00% 7.00% 15.50% 11.50% 11.50% Oct 6.00% 8.50% 8.00% 8.00% 14.50% 13.50% 13.50% Nov 5.50% 8.50% 8.50% 8.50% 14.00% 14.00% 14.00% Dec 6.00% 8.50% 8.50% 10.00% 14.00% 13.50% 13.50% AVERAGE 5.54% 7.29% 7.92% 7.96% 13.58% 12.92% 12.75% Don’t assume carriers have the same fuel surcharge
  12. 12. Accessorial ChargesYear Ground Residential Surcharge Increase Air Residential Surcharge Increase DASC air DASR air2006 $1.75 $2.10 $1.30 $2.102007 $1.85 5.71% $2.20 4.76% $1.40 $2.202008 $1.95 5.41% $2.30 4.55% $1.50 $2.302009 $2.05 5.13% $2.40 4.35% $1.60 $2.402010 $2.20 7.32% $2.50 4.17% $1.70 $2.502011 $2.45 11.36% $2.75 10.00% $1.85 $2.752012 $2.55 4.08% $3.00 9.09% $2.00 $3.002013 $2.80 9.80% $3.20 6.67% $2.15 $3.25 Just an example There are lots of accessorial increases
  13. 13. OF CONCERN
  14. 14. Notes to SelfNote to self: Rate increases are not linearNote to self: Your business is not linearNote to self: No two customers will be impacted the same wat because the announcement of “average” increases is meaningless since there is no “average” shipperNote to self: Build a model of your business using pivot tables or a third party so that you know your book of business as well as your carrier doesNote to self: Increases are negotiable, even if you have a contractNote to self: Understand your use of accessorials!Note to self: Automate and simplify the use of less expensive, guaranteed services that can fulfill the recipients need for speedNote to self: Consultants can get you a 49% better discount than you can achieve on your own Make no assumptions based on the “average” numbers announced
  15. 15. If you liked what you heard• Jerry Hempstead• 1724 Buckhorn Pl• Orlando Fl 32825• 407-342-3825• gmhempstead@aol.com

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