Shipping Costs on the Rise

I am sure by now that you have noticed gas prices have recently been increasing.  One industry that bases their pricing model on the average cost of fuel is the shipping industry.  With the gas prices increasing it is only natural that the cost of shipping increases along with it.  With virtually all promotional product orders being shipped directly to the end users, shipping rates have the potential to have a major impact on the promotional product industry.

Two of the industries leaders, FedEx and UPS, have both increased their freight rates recently.  UPS has increased their general rates by 4.4% starting at the end of the first quarter this year.  FedEx on the other hand, not only has increased their general rates for freight by 3.9%, but has also increased their fuel surcharges by 3 percentage points according to a News Release on May 2, 2014.  The U.S. Post Office has also announced that they will be increasing their rates as well by the end of 2014.

While you may be already feeling the affects of these increases, unfortunately there are more changes to come.  FedEx has announced in the same May news release that they will be changing the way that they calculate shipping costs for all ground shipments.  Instead of just using the weight of the package, they will take the volume  into consideration in relation with the actual weight of the package.  The shipping giant is currently using this model for all ground packages that have a volume that exceeds three cubic feet.  This practice will be applied to all ground shipments beginning in January of 2015.



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