Hello! Welcome to SLB Performance’s bi-monthly newsletter. We hope you find the information useful. If you would like to learn more about what SLB Performance offers, just let us know.
In a recent note on FedEx JP Morgan analyst Brian Ossenbeck highlighted a growing tension in the parcel sector: “discussions across the parcel industry confirm shippers are increasingly pushing back on higher rates while competitors add capacity to the market regularly.”
Indeed, many shippers are balking at sustained rate hikes, citing margin pressures, tighter budgets, or availability of alternatives. But alternative solutions are growing, in the business-to-consumer (B2C)/final mile delivery space.
We’ve written about this shift several times but as more alternative solutions enter this market, the former ‘duopoly’ of FedEx and UPS is turning their focus towards the more profitable business-to-business (B2B) parcel market while letting other last-mile solutions take market share in the B2C parcel market.
While UPS CEO, Carol Tome told analysts in August that “competition is good,” UPS CFO Brian said, “I think it’s really important that the revenue per piece growth of 5.5% is starting to show that the strategy of dynamically changing the volume in the network is working, right? And if you look at the segments where it really matters for us, SMB, our penetration was up 230 basis points. Commercial, our penetration was up 220 basis points.” In other words, UPS really does not want your B2C volume. If they accept it, you, the shipper, will pay more for it.
As we’ve recommended for quite a while now, check out the numerous options for last-mile delivery – if you’d like to learn more about them, let us know. And, remember, the duopoly is dead, you don’t have to pay high rates and surcharges.
For more:
Supply Chain Dive – Alternative delivery providers ramp up service coverage
Freightwaves – FedEx, UPS peak season surcharges could drive shippers to competitors
What does this mean for you?
Shippers are now in the drivers’ seat when it comes to negotiating rates and surcharges. But, you still need to know your options, and there’s a growing number of options these days, and also be willing to walk away if you are not getting a good deal.
Know Your Surcharges and Rates – July 14 FedEx Surcharges
The UPS Tariff/Terms and Conditions of Service and the UPS Rate and Service Guides have been updated effective October 1, 2025.
*Reach out to me if you have any questions about these changes.
Why am I telling you this?
I’m Jay Kent, managing director of SLB Performance, a consulting firm that helps companies, like yours, reduce supply chain costs, implement BI tools, improve in-stocks and customer service. After 25 years of leading some of the most complex supply chains in the industry, I began advising companies like yours in how to mitigate costs and improve efficiencies. I am here to help you better understand the market. So twice a month, I’ll share relevant small parcel and supply chain news.
Let’s talk! An initial consultation with me will cost you nothing. Click here to schedule a call.
Look for the next Jay’s Parcel Notes, a twice a month LinkedIn newsletter for additional news and thoughts.
Jay Kent