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. It’s important to understand the market to mitigate costs and improve efficiencies. 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.
Rates and Surcharges
- Just four days after extending “demand” surcharges on additional handling and oversized surcharges, FedEx announced an increase to both surcharges, effective February 5 until further notice. More here.
- Meanwhile, higher USPS rateswent into effect on Jan 21. Ground Advantage prices increased by 5.4%, Priority Mail prices increased by 5.7%, and Priority Mail Express prices increased by 5.9%. In addition, price increases for Special Services products, including Post Office Box rental fees and some international mail services that include Registered Mail and International Mail insurance, also went into effect.
- While the USPS was raising rates, a study found that it lost $25 millionin revenue on its returns services due to pricing errors. As a result, the USPS plans to move to a new pricing and payment system in 2025, which will factor facility type into price verification.
On-Time Delivery
The USPS published its service performance scores covering January 1 through January 12, including:
- First-Class Mail: 85.8% of First-Class Mail was delivered on time against the USPS service standard, consistent with performance from the fiscal first quarter.
- Marketing Mail: 93.7% of Marketing Mail was delivered on time against the USPS service standard, consistent with performance from the fiscal first quarter.
- Periodicals: 81.5% of Periodicals delivered on time against the USPS service standard, an increase of 0.8 percentage points from the fiscal first quarter.
USPS delivery was impacted in some local markets due to industry-wide disruptions in both ground and air transportation caused by winter storms across the country.
Additional delays across the country, such as in Houston, continue. Aspokesperson for the USPS said in a statement, “The postal service is working through a system-wide transition to modernize our mail and package processing network in the interest of making its operations more efficient and cost-effective.”
And in Virginia, the USPS is described as a ‘necessary evil’ and ‘consistently inconsistent’ due to delays.
UPS Air Service Returns
After a nearly four-year hiatus, UPS has relaunched its guaranteed 2nd Day Air AM shipping and delivery service. According to the Courier-Journal, this service was initially paused by the company in early 2020 when shipping and delivering patterns shifted to predominantly residential orders as a result of the pandemic.
“Since then, our network has adapted, and our customers are seeking this offering because it’s a more business direct offering rather than the residential services we saw a heavier need for in 2020,” said a UPS spokesperson.
That’s it for now. Comments are always welcome. Reach out if you’d like to learn how to lower or even possibly eliminate any parcel fees. Stay tuned for the next newsletter on January 24, and don’t forget to hit the subscribe button to ensure you receive it in your LinkedIn notices.
-Jay