UPS and FedEx 2024

GRI 2024: Effects and comparison between FedEx and UPS GRIs

by BlogTSM

The holiday season is here. It’s the time for shipping carriers to announce their General Rate Increase (GRI). Major shipping carriers like FedEx and UPS have already announced the GRIs for 2024. Well, what does this mean for e-commerce retailers or small companies? This blog will discuss the concept of General Rate Increase, its impact on businesses, and the strategies adopted by them. Further, we give a comparison of FedEx and UPS rates for 2024.

General Rate increase

General Rate Increase or GRI is the annual percentage increase in shipping rates by shipping carriers. This rate hike is across all services offered by parcel and freight carriers. GRIs announcement is usually in the fall of the previous year. The percentage hike is generally between 4-6%. The GRI announcement allows businesses to plan the shipping costs of their packages.

Many factors influence GRI, like labor shortages, operating costs, and insurance. In addition, rising inflation, market demand, supply chain disruptions, and government regulations can influence GRI. Moreover, various challenges to shipping carriers’ distribution networks have influenced GRIs this year. Shipping carriers mention service enhancement, technology innovations, and fleet maintenance for the annual General Rate Increase. These rates vary between shipping carriers. Understanding the GRIs of different parcel carriers is essential for shippers to manage shipping costs.

GRI: its significance in the shipping industry

Companies with domestic and international shipments can’t take rising GRIs lightly. The shipping rates also include surcharges or value-added services. In addition, the fees of different shipping carriers rise annually. Companies can calculate shipping costs based on service levels, distances, package weights, etc. The increase in shipping rates is responsible for the rise in shipping costs to various destinations. Shippers have to plan their shipments according to the impact of GRIs.

Impact on General Rate Increase on shippers’ packages.

GRI percentage is higher for packages going a longer distance. Moreover, express packages or air freight rates are high. Usually, GRI is more economical for ground packages than express ones.

The impact of GRI is less for companies that have negotiated a rate cap in their shipping contracts. They can further ask for discounts from the shipping carriers. However, companies with no contracts pay extra with the rise in GRIs annually. However, the rate cap does not apply to surcharges.

Our earlier blog has discussed about impact of GRI. Here, we will discuss the new shipping rates in 2024 of the premium big carriers, FedEx and UPS.

Comparison between FedEx and UPS rates

FedEx GRI will come into effect from January 1, 2024. UPS GRI will be effective from December 26, 2023. GRI varies from the surcharges or value-added services levied by FedEx and UPS.

The U.S. domestic, export, and import services, FedEx Express shipping rates have increased to 5.9% on average, as per the FedEx website. According to the UPS website, the rates have increased to 5.9% for UPS Ground, air, and international services. Both FedEx and UPS claim that GRI 2024 is lower than last year’s GRI. However, their demand surcharges for the holiday season are moving northwards. These rates also do not include fuel surcharge.

The annual rate guides of FedEx and UPS help shippers decide their shipping strategies. We will try to understand the figures in service and preview rate guides for 2023 and 2024.

  • Daily rates of UPS and FedEx

The UPS service guide consists of the domestic daily rates for packages weighing 1 lb to 150 lbs within 49 contiguous States. Daily rates for packages weighing less than 150 lbs for international shipments are under different UPS Worldwide, UPS Standard from Canada and Mexico, export, and import headings.

The UPS service guide contains domestic rates for services like UPS Next Day Air Early, UPS Next Day Air, UPS Next Dy Air Saver, UPS 2nd Day Air A.M., UPS 2nd Day Air, UPS 3 Day Select, UPS Ground for shipping Zones 2-8 within the 50 states. Chart 1 compares between 2023 and 2024 daily rates for the UPS express and UPS ground package delivery services.

Chart 1: UPS list rates

Chart 1 will focus on list rates of : UPS packages of 1 lb within the U.S. daily rates for services in Zone 102 (Next Day Air), Zone 202 (2nd Day Air), Zone 2 (Ground), Zone 242 (2nd Day Air A.M.) for Destination ZIP codes starting with 004-005. For further details on all the daily rates of UPS, check their website.

FedEx service guide provides information about the list rates of FedEx Express packages within the U.S. and the international package rates for export and import. The guide consists of the FedEx ground rates within the U.S. and Canada. UPS Ground and FedEx Ground services are cheaper than Express Services.

The FedEx U.S. express packages cover FedEx First Overnight, FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day A.M., FedEx 2Day, and FedEx Express Saver services. It includes Zones 2-8 in the contiguous U.S. for packages weighing less than 150 lbs. Further, Chart 2 covers the U.S. express packages of 1 lb in Zone 2 (within 150 miles) across service levels, including Ground. It compares the 2023 and 2024 rates and their GRI percentages.

Chart 2: FedEx list rates

Chart 2 will focus daily rates of FedEx packages of 1 lb within the U.S. for services in Zone 2. For further details on the service levels of FedEx, check their website.

Shippers can explore the services that deliver their parcels faster and economically. Further, companies can explore the list rates of other services to suit their shipping needs.

  • Surcharges or Value-added services offered by FedEx and UPS

Alternatively, companies know about the surcharges levied by FedEx and UPS every year. Below Charts (3 and 4) compare FedEx and UPS surcharges for 2023 and 2024.

The value-added services of UPS will be effective from December 26, 2023. Domestic charges like additional handling, address correction, delivery area surcharge, remote area surcharge, Pickup fees, and more have seen an upward trajectory. The below chart 3 gives an overview of a few value-added services from 2023 and 2024.


Chart 3: UPS Surcharges

UPS website gives information in detail about the value-added services and other charges. In addition, it also provides the changed zip codes, where the delivery area surcharge is in 2024.

According to the FedEx authorities, there will be an assessment of Additional Handling charges and Oversize charges of packages for multi-piece international shipments. FedEx Ground and Express services will face an increase in surcharges from January 1, 2024. The customs clearance service fees on imports are also increasing in 2024.

Chart 4 depicts the increase in the percentages of surcharges in 2024 compared to 2023.

Chart 4: FedEx surcharges

Zones 3-4 also include  U.S. Ground Zone 22 (Intra-Alaska), U.S. Ground Zone 14 (Intra-Oahu), and U.S. Express Intra-Hawaii.

FedEx freight shipping charges are also changing from January 1, 2024.

Not just the daily rates, companies are facing the brunt of high demand surcharges and fees levied by UPS and FedEx. Businesses need to devise shipping strategies to circumvent the impact of increasing GRIs year-on-year (YOY).

  • Effect of Minimum Charges and the necessity of rate caps

Minimum charges are the lowest fees a shipper will spend on any package. Carrier package minimum charges are the fees for a Zone 2 one-pound package. Minimum charges apply to shippers even if they have existing discounts.

Chart 5 compares the UPS Minimum Net Charges for some services in 2023 and 2024.

Chart 5: UPS Minimum Net Charges for package with 1 pound weight for UPS Ground – Zone 2, UPS Next Day Air-Zone 102, UPS 2nd Day Air- Zone 202, UPS Next Day Air Saver – Zone 132

Fedex sets minimum charges for all services. It is usually for a Zone 2 one-pound package for all services. The comparison between the services in 2023 and 2024 is in Chart 6.

Chart 6: FedEx Minimum charges for zone 2, 1-pound packages

Shippers can get discounts on low-weight packages with FedEx minimum change reductions in their contract agreements.

Moreover, companies with rate caps can limit any increase to a value close to a negotiated rate cap. Hence, companies must include rate caps in their contract negotiations to keep rate increases in check.

Ways to offset the impact of GRI on businesses

It’s not possible to avoid the impact of GRI on businesses. However, there are ways to reduce shipping costs effectively. A few ways to offset the GRI impact are:

  • Negotiations

Shippers can revise their contracts if they have not renegotiated for many years. Further, parcel carriers face competition from new entrants and fluctuating shipping volumes. It gives shippers a chance to negotiate for better shipping rates. 

  • Intelligent use of shipping data

Companies can use their historical shipping data to plan their shipping strategies. The data helps shippers understand their shipping operations. A deep knowledge of the shipping profile, service levels, distance, and package weights helps keep shipping costs down.

  • Diversifying carrier network

Shippers can use alternative carriers, regional carriers, and postal services at competitive rates. Packages can be sent to various locations easily through different shipping carriers. It helps in reducing the impact of shipping rates substantially.

  • Focus on packaging

Oversize packages are expensive to ship for companies. So, shippers have to focus on packaging goods to minimize space and save money.

Conclusion

Businesses need to understand the different aspects of GRI. In addition, its impact on shippers’ shipping profiles will help companies reduce shipping costs. Conducting an audit of the shipping operations allows companies to negotiate better with shipping carriers. Further, partnering with Audintel gives shippers valuable insights into their shipping profile. It helps them to prepare cost-effective shipping strategies to reduce GRI impact.

About Audintel

Audintel is a technology-first and customer-focused organization that optimizes logistics and shipping costs. Our trustworthy solutions help clients gain deeper insights into their logistics spending. For more information about GRIs and their impact on your business, contact us at +1 (619) 354 8539 or visit our Audintel website.

SOC Compliance

How SOC 2 compliance is crucial for privacy and data security?

by BlogTSM

Numerous businesses amass extensive customer data during shipping, prompting concerns about potential cyber-attacks and data breaches. As a result, they seek assurance from their service providers regarding safeguarding this data. Companies offering software and audit services implement stringent compliance standards and security measures to ensure data protection. Various compliance standards, such as ISO 27001, SOC 1, SOC 2, CSA STAR, and ISO 27701, are employed for information security management. However, SOC 2 is the preferred choice for many software providers in the United States.

This article delves into the significance of SOC 2 compliance within supply chain management, highlighting its importance. Additionally, we are pleased to announce that Audintel has achieved SOC 2 Type 1 compliance, reinforcing our commitment to data security.

SOC 2 compliance

System and Organization Control 2, or SOC 2, focuses on proving an organization has implemented essential data security controls. As developed by the American Institute of CPAs (AICPA), SOC 2 defines criteria for managing customer data, including in the cloud. Further, SOC 2 is unique to each organization, its business practices, and controls. A company that undergoes a SOC 2 audit demonstrates its ability to provide safe and secure services. In addition, it ensures data protection from any theft.

Essentials of SOC 2 compliance

SOC 2 is an audit procedure that manages consumer data and works on five trust principles or criteria, namely,

  • security – which involves safeguarding the company system from unauthorized access through logical or physical means. Utilizing software tools, one can effectively oversee and mitigate issues. The issues of unauthorized information manipulation, disclosure, deletion, theft, or misuse. These tools encompass features of two-factor authentication, network and application firewalls, and intrusion detection systems.
  • availability – pertains to ensuring that the company system, service, or product remains accessible and fully operational by contractual commitments. Additionally, effective management necessitates implementing performance monitoring, incident management, disaster recovery plans, and related processes.
  • processing integrity – entails ensuring that systems and data processing are thorough, precise, punctual, and conducted with proper authorization. Managing this aspect involves vigilant process monitoring and implementation of quality assurance (QA) procedures.
  • confidentiality – involves safeguarding information identified as “confidential,” ensuring its security. It encompasses data such as Intellectual Property (IP) content, business strategies, and sensitive financial details, subject to strict access limitations. The preservation of confidentiality relies on tools such as encryption, access control measures, and network firewalls.

and

  • privacy – entails ensuring that personal information, which is collected, stored, utilized, disclosed, and disposed of, aligns with the company data policies and adheres to the Generally Accepted Privacy Principles (GAPP) established by AICPA. Personal data consists of names, addresses, Social Security Numbers, and more, necessitates enhanced protection measures. Therefore, implementing rigorous access controls and encryption is crucial to thwart unauthorized access.

An external auditor awards SOC 2 certification to the service provider that follows the above five trust criteria. After the audit, the company will get a Type 1 or Type 2 SOC report.

SOC 2 Type 1 reports

SOC 2 Type 1 report describes the systems of a service provider. It reviews the design of its security controls at a point in time. It gives a competitive edge for start-ups against new companies offering the same service. It is a preliminary step towards achieving Type 2 certification.

SOC 2 Type 2 reports

SOC 2 Type 2 report details the operational effectiveness of the system. It is an extensive audit process to confirm the effectiveness of the security processes. SOC 2 Type 2 audit confirms the control processes are consistently working and effective. The review period for this certification is over 6-12 months.

Necessity of SOC 2 compliance in the supply chain industry

As the supply chain industry is inching toward complete digital transformation, shippers require software providers that are SOC 2 compliant. SOC 2 is a rigorous audit procedure by third parties to validate a service provider’s adherence to security compliance. In addition, SOC 2 compliance assures clients that the service provider is security conscious.

It is a testament to the integrity and commitment of a company to its customers to keep their data secure. Being SOC 2 compliant enhances the company’s reputation for storing sensitive information securely.

At Audintel, we emphasize safeguarding our customers’ data and maintaining strict confidentiality. Towards this commitment, we are delighted to announce that Audintel has achieved SOC 2 Type 1 compliance. Our business practices and policies underwent a comprehensive assessment by third-party auditors, successfully meeting all the requirements for Type 1 compliance. We take pride in offering state-of-the-art technology for transport spend management, revolutionizing shipping operations.

All the data on the Audintel website is encrypted and secure. Moreover, our teams are responsible for safeguarding user data. Further, we plan to achieve SOC 2 Type 2 compliance within a few months.

Closing thoughts

Information security is at the forefront of all businesses. Third-party vendors and cloud-computing service providers utilize data for various services. Thus, companies must partner with reliable third-party service providers that secure their data. SOC2 compliance is one of the most stringent compliance standards companies look for in their data security.

Audintel is SOC 2 compliant. Our commitment is to provide top-quality services. We give cutting-edge technological services to our clients with stringent security standards. Know more about our services by talking to us at +1 (619) 354 8539. Additionally, you can visit our Audintel website for further information.

Small_Parcel_Shipping_Challenges

How to overcome challenges of small parcel shipping?

by BlogTSM

Small Parcel shipping is challenging for many shippers. Businesses need strategic solutions with the right software tools to ship small parcels efficiently.

The convenience of ordering online is here to stay. Experts believe there’s been a significant increase in the volume of shipping small parcels to customers directly over the past few years. However, small parcel shipping domestically or internationally requires strategic planning. Inflation, record-high gas prices, supply chain disruptions, and more contribute to various challenges during shipping. Shippers need to automate shipping processes to save time and enhance customer satisfaction. This blog will focus on the challenges shippers face when shipping small parcels.

Small parcel shipping

Packages such as envelopes, posters, small boxes, etc., weighing less than 150 lbs are small parcels. Shipment of small packages requires efficient pickup, transit, and delivery. They do not occupy full truckload capacity like freight or large packages. Each small parcel order is unique and has various requirements. Shippers face challenges when shipping small parcels direct to customers (D2C).

Some of these challenges include:

  • Management of high volumes of small parcels

As customers shifted to e-purchases, there has been a rise in small parcel shipping volumes. Warehouse workers and truckers keep parcel volumes moving to prevent supply chain disruptions. LTL carriers disassemble small parcels or less than pallet load (LPL) shipments to fill their trucks. It may cause damage to the goods during transit.

  • Labor requirements

Processing small parcel shipments requires more labor or workers than bulk shipments. It leads to higher shipping costs for shippers. This cost is either transferred to customers as shipping fees or is a part of the product. Companies hire more people for warehouses and fulfillment centers for shipping small parcels.

  • Overcoming packaging hurdles

Small packages can vary in size, weight, and dimensions. Picking out the ideal packaging material is necessary to prevent shipping delays. Padded mailers and envelopes are appropriate for single items. Fragile items need packing in boxes with proper dimensions to avoid damaging goods in transit. In addition, heavy packages cost more to ship than light ones.

  • Accessorial fees charges

Many transportation service providers charge accessorial fees for small parcel shipping. These fees are residential charges, additional handling, address correction, weekend pickup/delivery, and more.

  • Selection of appropriate parcel carriers and services

Last-mile delivery of small parcels is essential for better customer satisfaction. Choosing the correct local parcel carriers is necessary as inexperienced and untrained courier staff can damage the goods. Hence, selecting the parcel carrier and the appropriate services allows shippers to cater to their customers’ needs.

Retail consumers expect on-time delivery and updated arrival status of packages. And failure to meet customers’ expectations causes loss of repeat business. Providing reliable services with greater visibility gives shippers an advantage over their competitors. Many parcel carriers like UPS and FedEx enhance customer experience with their services.

UPS small parcels

UPS has various options for small parcel delivery that are tailor-made for small businesses. They provide access to Drop Boxes, pickup options, and an-inclusive rate for shipments. They have defined the price range and service level for small parcel deliveries of particular dimensions at specific times. For example, UPS Ground services can provide 1-5 delivery dates for shipping small parcels.

FedEx small parcels

FedEx has different package classifications based on size and weight for delivering small parcels. For instance, FedEx’s Flat packages have short dimensions and a volume of around 400 cubic inches. FedEx has various small parcel limits for domestic Ground services than Express Services.

A third-party (3PL) provider helps shippers in carrier management. They can negotiate better shipping rates for shippers to get better discounts. Further, they can compare carrier performances and suggest services of multiple parcel carriers. With expert knowledge of packaging expertise, they can provide cost-effective solutions.

Audintel- for faster and cheaper small parcel shipping

Our state-of-the-art shipping optimization platform helps manage small parcel delivery. We offer customizable dashboards that continuously monitor shipping status and on-time delivery of packages. Audintel’s automated real-time customer notifications keep our clients abreast of the entire shipping operations of packages. Our expert team can provide shippers with data to compare carrier performance, identify areas of saving money and time, and more.

Companies can streamline their small parcel shipping needs with Audintel’s Transportation Management System (TMS). We provide customized views within our dashboards even for the shipping’s made through small parcels to different destinations. Moreover, our software tools help reduce shipping costs for our clients by providing alternate solutions.   

Finally

During the pandemic, there was a drop in sales of brick-and-mortar products. E-commerce sales of small packages have grown exponentially. Smooth, reliable small parcel shipping is vital for shippers to improve their profitability. So, efficient management of high volumes of small parcels with advanced shipping software solutions is the need of the hour. Partnering with Audintel helps shippers overcome these challenges. We address each business’ unique customer preferences to ensure effortless, cost-effective delivery of small parcels.

Along with customized dashboards, Audintel do have 200+ reports available in their portal which are available for live customers which will help in generating and scheduling the reports based on their required criteria.

Wondering how much it will cost for small parcel shipping? Learn more about small parcels by contacting us at +1 (619) 354 8539 or visiting our Audintel website.

US Shipping Zones

U.S. Shipping Zones affecting shipping costs: here’s why

by BlogTSM

As an e-commerce business owner, understanding shipping zones is essential to fulfilling shipping orders. Shipping packages to remote locations costs money. But improving delivery time attracts consumers. Companies need to save money and reduce delivery time to be profitable among their competitors. This blog will help companies understand the U.S. Shipping zones. And highlight the effective ways to save money and time.

U.S. Shipping Zones: what are they?

Postal zones across the U.S. are the shipping zones. They are the geographical regions where shipping carriers can deliver packages. Parcel carriers can calculate the price for delivery of a parcel based on the distance. There are eight U.S. shipping zones domestically. Zone 9 is for the freely associated States or territories outside the U.S. mainland (for example, Marshall Islands, Micronesia, Palau).

How to calculate U.S. Shipping Zones

The U.S. Shipping Zones calculations are from the point of origin of the package to the destination. They are divided into a 100-mile radius according to the postal ZIP codes. Zone 1 is the region where the shipment originates. Shipping Zones 2 to 8 are dynamic and depend on where the package is shipped. In addition, shipping packages sent to distant locations lead to a rise in shipping costs. Shipping Zone 8 will be the furthest destination. Shipping packages within a zone costs less.

For example, shipping a package from San Francisco, California, to Atlanta, Georgia, means the shipment is going to Zone 8. However, if you are shipping a package within fifty miles of San Francisco, it is within Zone 1.

Shipping Zones by carriers

Shipping costs increase by Zone and shipping carriers charge based on the distance and weight of the package. Each shipping carrier has a different Shipping Zone Map and ZIP codes in each Zone. In addition, some services of shipping carriers vary according to the U.S. Shipping Zones. For instance, FedEx Priority Overnight Express services have sixteen zones.

Now, let’s understand the shipping for the major shipping carriers across the U.S.

UPS Shipping Zones

UPS provides an online tool for entering the Postal code of origin, and the user can download the Zone Map. Further, UPS Daily Rate Guide helps companies determine the costs and services for a shipment. The weight of the packages will also increase the shipping costs. Parcels weighing less than 1 pound do not cost more than heavy ones.

FedEx Shipping Zones

On the FedEx website, entering the ZIP code of the package origin and the destination ZIP code provides the FedEx shipping zone. Further, FedEx shipping rates give price details based on package weight and FedEx service. For instance, shippers can use the FedEx Ground service chart to track their shipments from the entered ZIP code.

USPS Shipping Zones

USPS has an online site to download the Zone chart after entering the origin and destination ZIP codes. But, the pricing of the services is not in the Zone chart.

 USPS has fixed-rate pricing for many services. Most shippers opt for USPS services due to their flat-rate pricing, which is easy to understand.

Regional carrier Zones

U.S. Shipping zones are calculated differently by regional carriers. They will concentrate on particular regions for delivery fulfillment rather than an entire state. Shippers opt for regional shipping carriers to send their packages to a specific location. For example, OnTrac helps shippers to calculate the transit time based on the ZIP codes for pickup and delivery.

Ways to minimize shipping costs and delivery time

Businesses can use different shipping Optimization strategies to minimize shipping costs and delivery time. Some of these ways are:

  • Opting for multiple fulfillment centers

It allows shippers to send packages to customers quickly and efficiently. Historical shipping data helps shippers to locate the best locations of fulfillment centers. Businesses can choose the best cost-effective services and rates provided by shipping carriers.

  • Identifying shipping carriers with flat rates

Shippers can opt for shipping carriers that provide flat rates that remain consistent irrespective of the shipping zone. Shippers can save money and time with the shipping costs being predictable and reliable.

  • Using local shipping carriers

Businesses can use local shipping carriers for last-mile delivery of shipments. It lowers shipping costs and brings customer satisfaction.

  • Partnering with Third-Party Logistic Providers

Third-Party Logistics (3PL) Providers are experts in shipping optimization. They have in-depth knowledge of shipping carriers’ tables, shipping zones, shipping regulations, etc.

Audintel’s SaaS solutions help Third Party Logistics (3PL) Providers automate order fulfillment processes. Our state-of-the-art analytical tools help shippers locate the nearest fulfillment center for quick delivery of packages. Audintel also offers shipping optimization strategies to our clients for cost-effective solutions.

To Wrap it up

It becomes confusing for businesses managing their order fulfillment to understand and calculate the U.S. Shipping Zones. Further, the shipping charges vary among different shipping carriers. Partnering with a 3PL help ease shippers’ hassles of figuring out the Zones Chart of shipping carriers and save money. Audintel provides automation tools that help 3PL in transport spend management. We help clients understand the complex shipping Zones of different shipping carriers.

Learn more about how Audintel can reduce shipping costs by contacting us at +1 (619) 354 8539 or visiting our Audintel website.