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It’s Crunch Time for Small Parcel Shippers: A Checklist

It’s been a crazy year for the small parcel shipping industry. But now is no time to think too much about what’s happened the past ten months. Smart small parcel shippers should be focusing on what they need to do to make it through peak season and position themselves for another difficult year in 2021.

The message here is not to be all doom and gloom, however. With disruption and change comes opportunity — and maximizing the positives that can come out of the current circumstances is exactly what we are hoping you and other shippers can get out of this article!

So, here’s a quick three-question checklist we have for every small parcel shipper who wants not only to survive the next 12 months but excel.

#1 – Are You Educated on the ‘Here and Now’ of Market Conditions?

This year has been unprecedented in the number and frequency of mid-year announcements of new fees and surcharges by UPS and FedEx.

To this date, there are still many ongoing Peak Season Surcharges and other fees and surcharges hanging on from earlier in the year. You’ll be forgiven if you’ve lost track, because the carriers have kept many of the announcements very low key.

Read Transportation Impact’s detailed summary of the Peak Season Surcharges from UPS and FedEx.

Our best advice to small parcel shippers is to continue monitoring the carriers’ websites for updates, as well as our own blog, in which we immediately report on all fee and surcharge updates announced by the carriers (check out the logistics industry’s best blog on topics related to shipping and your supply chain).

It’s not quite here yet, but the 2021 GRI from FedEx has been announced. Understanding what the increase will mean to your shipping costs should be a huge priority for all FedEx customers.

Read the most complete 2021 FedEx GRI Analysis, available from Transportation Impact.

And, listen to Episode 6 of the Let’s Talk Ship webinar series to hear how the FedEx GRI will affect your small parcel shipping costs.

There is more to come for the industry, since UPS has not announced its 2021 GRI yet. If past years are any indication, it could be announced as late as the middle of December. Regardless of when it happens, TI will publish our usual insightful analysis on how the 2021 UPS GRI will affect your costs and service, as well as provide a detailed comparison of the two carriers’ General Rate Increase announcements. Stay tuned for those two upcoming reports.

#2 – Are You Able to Accurately Budget Your 2021 Shipping Costs?

The impending UPS GRI announcement aside, do you have the information on hand to accurately budget your logistics costs for 2021? Just because rates are turbulent doesn’t mean shippers shouldn’t be doing their best to forecast and mitigate cost increases for next year.

The next step after making sure you are educated on the current situation (as we highlight in #1 above) is to calculate the actual cost impact to your budget for next year. There’s no way anyone could have anticipated the way costs have gone up for small parcel shippers in 2021, but rates have at least stabilized to the point that shippers should be able to understand their impact.

Applying all the current rate changes and fees to quantify their impact is not simple or easy to do on your own. Here’s a simple and free suggestion — email and we’ll run an analysis to show you exactly how your parcel (and freight) shipping costs will change as a result of all the increases in 2020, as well as the upcoming GRIs.

#3 – Do You Have a Plan for Staying Informed?

COVID is still impacting both how the carriers operate and customer expectations. Luckily, the onslaught of additional surcharges and fees has slowed. But many are still in effect and can be adjusted by the carriers at any moment. No one should think we are out of the woods yet when it comes to what future impact the pandemic will have on the industry. So, staying diligent and up to date needs to remain a top priority for all small parcel shippers. Again, to always stay in the know, you can read the shipping industry’s best news blog on logistics and supply chain.

Hopefully, you’ve answered with a confident YES to each of the three questions. We recommend pairing the information and suggestions we’ve made here with a full understanding of how your own business’ shipping needs may have changed in 2020, and what’s in store for your company in 2021.

Now is not the time for complacency when it comes to small parcel shipping. Peak season is in full swing and 2021 will be here soon. There are too many changes on the horizon (and at the doorstep) and your shipping operation is too integral to your success to not be proactive when it comes to making this function the best it can be.

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