Expectations have been set that FedEx and UPS will raise Ground rates on an annual basis. This year, however, rate increases have a stronger punch especially when considering additional changes, which include recent modifications to fuel surcharge tables and the implementation of new Ground dimensional weight standards. Instead of blindly accepting these increases, shippers should instead be asking for justifications. Are there other options available for shippers?

Since the "Great Recession," the US economy has been operating in recovery mode, albeit sluggish at times. Unemployment is slowly declining, manufacturing production is positive, trade is improving and inflation has been minimal. Food, energy and medical care appear to be the primary drivers for inflation increases.
Meanwhile, average daily parcel volumes for FedEx and UPS have steadily increased along with average revenues per parcel. For FedEx, average revenue per Ground parcel has risen from $7.70 for fiscal year 2009 to $9.25 for fiscal year 2014, reflecting over a 20% increase. UPS, although at a slower rate, realized average revenue per Ground parcel increases from $7.20 for its fiscal year 2009 to $7.85 in fiscal year 2014.

When compared to the US Bureau of Labor's CPI (Consumer Price Index), a measurement of inflation, average annual Ground rate increases have significantly outpaced the average annual inflation rate.

Download the PDF to see the full analysis, complete with charts.


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