During the onset of COVID in early 2020, UPS took many proactive steps to freeze customer discounts in the event that their rolling average dropped a portfolio tier. The rolling average was frozen at the amount it was on March 7, 2020. Many businesses faced decreases in their shipping volume as a result of COVID, and this initiative from UPS did help the shipper by maintaining their discounts with UPS. At that time, the process was unclear as to how long the freeze would last and whether customers would be responsible to manually monitor their own volume trends.
As we progressed through the end of 2020 and early 2021, UPS did indeed have some customers come off the freeze. Most were in good shape because their volumes had picked up enough to justify an “unfreezing” of their rolling average. However, the majority of customers who were frozen continued to be frozen as of late June, 2021. Unfortunately, that seems to have changed in early July, where we now see many customers coming off the freeze without being notified by UPS. The impact to these customers could be quite significant, and we have seen some now drop 2-3 tiers in their rolling averaging, resulting in 20-30% higher shipping costs. Thus, it’s critically important for customers that were on a freeze to monitor their rolling average and track where they fall in the event that their freeze is removed. There are always options to help remedy the situation in the event that you find yourself dropping tiers when coming off the freeze, but the key is knowing how to appropriately address it with the carrier in a timely and positive manner.
Gavin Creado is a National Account Manager for LJM Group, working closely with clients to manage cost optimization initiatives. His experience spans over 20 years with roles in sales operations, sales execution, and account management for Fortune 500, SMB, and Start-Up companies. LJM Group has been helping shippers save time and improve profitability with expert FedEx & UPS parcel contract analysis and rate negotiations, parcel invoice auditing, as well as shipping consulting services focused on cost management since 1998. Please visit our website at www.myLJM.com. To speak with Gavin, please call 631.844.9500 or email gavinc@myljm.com.
