Unless you’re new to the shipping industry, you probably know what the fourth quarter means: General Rate Increases (GRIs). Around this time each year, both FedEx and UPS announce their GRIs for the upcoming year. Each year for the past five years, this has meant a consistent increase by both carriers of 4.9% to their base freight charges.
Now don’t let that last sentence fool you. The 4.9% increase published by the carriers is an average increase, across all services and zones. The actual rate increases can vary dramatically on a service-by-service basis, and shippers can feel the impact very differently.
While these GRIs have become an annual tradition, many shippers are still unprepared for the hit to their bottom line. Here are three helpful mitigation strategies to keep your profits from leaking out year after year:
- Get in the Zone: optimize your supply chain to ensure you’re shipping from the proper DC’s for a given destination. The further a package is going, the higher the cost.
- Size Matters: the GRIs affect base freight charges, which are highly influenced by your package’s dimensions. Being aware of your packaging size and minimizing your dimensions can help ease the burden of these rate increases.
- Speak Up: you’re only going to get what you ask for, so don’t be afraid to negotiate for your company, and your customers. The GRIs affect the published freight charges, but you can always negotiate a better agreement between you and your carrier.
These strategies may seem complicated or time consuming, but our team at Zero Down is here to help. Between our years of industry experience and latest Business Intelligence tools, we can help your company save money, stress free.
Contact us for a free online demo today . . . because the GRIs are coming.