The first UPS and FedEx invoices of 2023 have started to arrive, and there is probably some sticker shock happening for many companies.
The biggest reason is that the actual cost increase most shippers face from the GRIs is very often more than the advertised 6.9%. Add to this the other fees and surcharges, including the extended demand surcharges from UPS, and 2023 is shaping up as a costly year for logistics departments everywhere.
While it’s too late to stop the GRIs from going into effect, it’s not too late to find ways to minimize or even eliminate their impact. Here are three ideas for what companies can do right now to keep this year’s parcel spending in check.
Look at your parcel data
Everything companies need to start saving money on their parcel shipping is right there in the data. All that’s missing is finding the right data analytics tools to use it. Leveraging the power of data takes companies past the old way of doing things, enabling more thoughtful and informed decision-making.
How can employing BI and devoting resources to data analysis help? Using the best parcel BI platform will highlight areas for improvement everywhere in your parcel operation — for example, where you’re overpaying on fees and surcharges — and suggest ways to avoid those extra costs.
Be better at auditing parcel invoices
UPS and FedEx have been off and on with their service guarantees for the past few years, and as a result some shippers have put less effort into auditing their invoices. This is a mistake for two reasons. First, there are likely plenty of service failures and refunds the carriers owe you for. Second, the carriers still frequently make errors with the calculation of fees and surcharges that auditing will catch.
The bottom line is shippers need to be checking their UPS and FedEx invoices to catch their carriers’ billing errors. Most companies can save 3%–5% on their parcel invoices by auditing.
Renegotiate your contracts ASAP!
It is NEVER a bad time to renegotiate your small parcel contracts. There are a lot of myths about why it’s bad, or that you’re not allowed to renegotiate a parcel contract before it’s expired, and most are wrong. After swinging the carriers’ way during Covid chaos, the negotiating leverage has swung back to shippers’ advantage, making now the time to engage in a new contract negotiation.
UPS and FedEx are dealing with the tough economy and inflation just like all companies are, and they’ll do what’s necessary NOT to lose business and to steal some package volume away from competitors where they can. As a shipper finally in a position of strength, now is your time to take advantage of the situation to negotiate better rates.
Do this next
The longer a company waits to address these three areas, the more money it’ll waste in 2023. TransImpact has solutions to maximize your savings when it comes to parcel shipping data, invoice audits, and contract renegotiations. Contact info@transimpact for a no-obligation analysis to learn how much you can save.