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.
Welcome to a special edition of Jay’s Parcel Notes. I spent most of the week in Las Vegas at Manifest, connecting and reconnecting with supply chain friends, including Steve Ferreira. Steve, it was great catching up with you again, and for those who missed our chat, check it out here.
Speaking of friends, Shipware shared another fuel surcharge increase from UPS – Effective February 5, 2024, UPS is increasing the International Ground Export Import Fuel Surcharge table by 100 bps.
This is UPS’s third fuel surcharge adjustment since December 4, 2023:
- December 4 – Ground & SurePost FSC Increase
- December 18 – Another Ground & SurePost FSC Increase
- February 5 – International Ground Export Import FSC Increase
Hmmm….so, if you listened to UPS’ earnings call on Jan. 30, you would have heard about declining volumes and declining fuel surcharges negatively impacting revenue per piece:
“International total average daily volume was down 8.3% year over year… A reduction in fuel surcharge revenue negatively impacted the revenue per piece growth rate by 60 basis points. And lower demand-related surcharge revenue, which was partially offset by the impact of a weaker U.S. dollar, decreased the revenue per piece growth rate by 50 basis points,” UPS CFO Brian Newman, Q4 Jan 30 earnings call.
Moving along…
Max Garland of Supply Chain Dive had a couple of great articles coming out of the UPS earnings call:
- What’s behind UPS losing volume from top customers? A number of reasons, including Amazon making more deliveries in-house, shifts to other carriers and buying online, and pick up in-store initiatives, contributed to the company’s Q4 volume decline.
(btw, Cathy Morrow Roberson also wrote on this topic – UPS fights for volumes)
- UPS to cut sorting shifts, make layoffs in 3 more states – UPS is cutting package sortation shifts and laying off employees at facilities in Connecticut, Maryland and Oregon in the face of weak package delivery demand.
Per CFO Brian Newman during the company’s Q4 earnings call: “In 2023, we closed over 30 sorts, and they remained closed during peak. By leveraging our network planning tools, we took advantage of the flexibility of our integrated network and flowed more volume into our automated buildings.”
In other news…
- Deliveright, the company behind AI-powered logistics and delivery platform Grasshopper, announced a new partnership with Wix.comLtd, a global SaaS platform, to create, manage, and grow an online presence. The partnership will simplify heavy goods shipping for Wix merchants and enable the best possible delivery experiences for their customers through automation.
- Carrier Logistics Inc,a provider of freight management software for LTL fleets, announced its Residential Delivery Automation System: Appointment Automation. LTL carriers can enable the text-integrated solution in their CLI FACTS software to manage final mile delivery operations more efficiently and effectively.
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 February 21, and don’t forget to hit the subscribe button to ensure you receive it in your LinkedIn notices.
-Jay