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.
Higher Costs
Effective this month – More zip codes have been added to UPS and FedEx’s Delivery Area Surcharges and effective May 4, OnTrac will add 136 zip codes to its Delivery Area Surcharges so be sure to review your parcel invoice and consider an audit – I can help you with both.
Meanwhile, AFS Logistics and TD Cowen announced the Q2 2024 released the TD Cowen/AFS Freight Index. Some of its findings include: Ground parcel rate per package jumped in Q1 2024, up from 23.8% in Q4 2023 to 28.8% in Q1 2024; As of March 2024, the jet fuel index is up 40% since 2021, but during the same period, the express fuel surcharge for both carriers is up over 100% for both carriers.
UPS Closures
- UPS is cutting a daytime package sorting shift at a Roanoke VA facilitynear the Roanoke-Blacksburg Regional Airport, affecting 153 employees. UPS cites a “reduction in volume” and said 120 part-time hourly employees, seven full-time hourly employees, 22 part-time management employees and four full-time management employees will be affected.
- Decreasing consumer and business demand has led UPS to disclose plans to end some sorting shifts in Greensboro and Charlotte NC. UPS said in a statement that “we continue to right-size our network and staffing to meet volume demands and maintain industry-leading service.”
Adapting to USPS Contract Change
- From Supply Chain Dive: FedEx’s network poised for a shakeup after US Postal Service split – FedEx could cut 50% of its daytime flight capacity and save $1.5 billion without the contract in place, Barclays analysts said in a February research note.
- UPS will hire more pilots for its USPS contract set to begin in September. However, the number seems to differ depending on publication – 300 or 170?
Freightwaves– UPS plans to hire 300 pilots to support Postal Service contract
The Sourcing Journal– UPS Hiring 170 More Pilots Ahead of USPS ‘Volume Surge’
USPS in the Hot Seat
- Postmaster General Louis DeJoy said in a hearing that USPSwill fix ‘deteriorating’ service in regions facing network shakeup. Network modernization plans, he added, remain a central part of USPS plans to cut $5 billion of costs and inefficient processes over the next two years — and vital to keep from running out of cash and meet its long-term financial goals. “In regard to service deteriorating, we recognize that, and we apologize to the constituents that we see that service. But in the long term, if we don’t make these changes, that will be every day, everywhere around the nation,” DeJoy told the committee.
Other News
- Better Trucks has added 1,100 additional ZIP codesto its delivery coverage area in the U.S., co-founder and CEO Andy Whiting told Supply Chain Dive. The expansion is aligned with customers’ needs and competitors aren’t covering as effectively.
- British Columbia-based last-mile delivery startup UniUni, which primarily serves e-commerce giants Shein and Temu, has secured $50 million USD ($69 million CAD) in Series C financing. The round was led by venture capital (VC) firm DCM and will be used to develop the proprietary tech stack powering UniUni’s logistics platform and to expand its delivery coverage in the United States (US), UniUni founder and CEO Peter Lu said in a statement.
- The recent collapse of Baltimore’s Francis Scott Key Bridge will impact last-mile carriers and their customers throughout North America according to the president of the Customized Logistics & Delivery Association (CLDA), Joel Pinsky. “We’re already hearing from our customers asking us what this will do to their costs and delivery times. I’ve heard from others in the association that the same thing is happening to them,” said Pinsky, who is also the CEO of Global Messenger and Logistics in Baltimore. “And for some of those deliveries, the tunnels are not an option because there are restrictions on vehicles that are transporting hazardous materials or have oversized dimensions. These vehicles will have to go all the way around the Baltimore Beltway or go through the city. This will add at least an hour. Not only will that delay them, it will also mean more traffic competing for the city’s streets.”
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 April 17, and don’t forget to hit the subscribe button to ensure you receive it in your LinkedIn notices.