I’m Jay Kent, managing director of SLB Performance, a consulting firm that helps companies reduce supply chain costs, implement BI tools, and improve in-stock and customer service. After 25 years of leading some of the most complex supply chains in the industry, I began advising companies in multiple industries and verticals. To mitigate costs and improve efficiencies, it’s important to understand the market. So, twice a month, I’ll share parcel news and thoughts. Be sure to hit the subscribe button to receive the latest newsletter in your LinkedIn notifications.
The official start to the holiday season kicked off with record sales on Black Friday and Cyber Monday. The record sales were attributed to retail discounts and promotions and, interesting enough, buy now, pay later services, according to Adobe Analytics.
Last-mile carriers will benefit this week from the record sales over the holiday weekend, but it’s likely that package volumes will trail off until shipping deadlines approach.
Deadlines are:
Fuel Surcharge Increase
UPS is increasing its fuel surcharge tables for International Ground Export, Ground, and SurePost by 0.5%, effective December 4, 2023. An interesting move as we read how diesel fuel costs are on the decline. According to Transport Topics, diesel’s price has fallen each week since a 10.1-cent rise on Oct. 23.
In the News
- From Freightwaves comes a story asking if we are in an unprecedented parcel rate war. My answer to that is yes and no. It depends on the potential profitability of the volume; otherwise, UPS and FedEx will likely pass on it. BTW, not sure how your packages stack up? Message me and schedule a quick chat.
- Walmart introduced parcel stations to speed delivery by using its private fleet to transport more online orders. According to Walmart, for customers, parcel stations give them more time to place online orders on a greater assortment of merchandise for Next Day Delivery. Walmart plans to have over 40 parcel stations in stores by the end of the year, with plans for more next year. Note this final statement from the company’s blog post – “As we do, we’ll not only enhance the way we serve Walmart customers but also other businesses with Walmart GoLocal.” Walmart GoLocal is its 3rd party delivery service.
- An interesting story from the WSJnotes that Amazon has surpassed FedEx, USPS, and UPS in terms of package delivery. Per the story – Before Thanksgiving this year, Amazon had already delivered more than 4.8 billion packages in the U.S., and its internal projections predict that it will deliver around 5.9 billion by the end of the year, according to documents viewed by The Wall Street Journal. Last year, Amazon shipped 5.2 billion packages. In comparison, UPS has said that its domestic volume this year is unlikely to exceed last year’s 5.3 billion, which includes packages delivered to customers through the postal service. In the first nine months of this year, UPS handled around 3.4 billion parcels domestically. FedEx’s domestic Express and Ground parcel volume reached around 3.05 billion for the fiscal year ended May 31, 2023. An eye-opener for sure, but the market had expected this for years. As Amazon expands its 3rd party delivery services, it will be worth evaluating as an option for shippers to add to their basket of carriers.
- Another interesting read but from the Washington Postdiscusses the struggles facing rural post offices – many are inundated with Amazon packages but do not have enough delivery people or money to pay for overtime to deliver the packages.
That’s it for now. Comments are always welcome. Reach out if you’d like to learn how to lower or even possibly eliminate the Additional Handling surcharge or any other parcel fee. Stay tuned for the next newsletter on Dec 13, and don’t forget to hit the subscribe button to ensure you receive it in your LinkedIn notices.- Jay