UPS and FedEx Small Parcel Contract Negotiations
Our team of experts help companies reduce their small parcel freight costs by an average of 15-30% by negotiating your rates.
With our unique experience and expertise we can help you level the playing field to not only save you money but, also time making your company more profitable.
7-10% of a company’s overall annual spending is with shipping. Yet, very few prioritize getting better shipping rates with UPS or FedEx. The ones that do, often do their own parcel contract negotiations and end up leaving thousands of savings on the table every year.
Mindful Logistics LLC has over 20 years of experience in parcel contract negotiation with FedEx and UPS. Since we started in 2016 we have saved our customer’s over $8 million.
While we are a small firm, we are experts in our industry and are a trusted consultant for our clients.
Shipping Statistics
7-10% of company's overall spending is on shipping.
We have 20 years of experience in parcel contract negotiations and parcel audits.
5.9% general rate hike in 2024 by US parcel carriers - the 2nd highest of all time behind 2023's 6.9%.
$8,000,000+ is how much we have saved our clients since 2016.
Up to 20% increases in accessorial surcharges for both FedEx and UPS in 2024.
15%-30% average savings for you!
Rate Negotiation & Audit Services
With near record high rate increases by UPS and FedEx, negotiating shipping rates is more important than ever.
Parcel negotiation with an expert can save you thousands every year.
Small parcel audits are vital for businesses that rely on UPS and FedEx for their shipping needs.
UPS and FedEx have complex pricing structures with various surcharges, fees, and discounts that can be difficult for businesses to navigate.
Parcel auditing services specialize in analyzing shipping invoices to identify errors and overcharges.
Freight Services
Freight Services are coming soon!
UPS and FedEx auditing is a critical process that helps businesses monitor and optimize shipping costs. By reviewing shipping invoices for errors like overcharges, late deliveries, and incorrect fees, companies can recover refunds, improve service levels, and gain valuable insights into their shipping operations. Regular audits not only save money by catching billing discrepancies but also provide leverage for negotiating better shipping rates and terms with carriers. Whether handled in-house or outsourced to experts, auditing ensures that businesses pay only for the services they receive, leading to better accountability and profitability.
UPS Rate Increase December 23rd by 5.9%. Just in time for holiday peak season.
Learn how the 2025 FedEx rate increase will impact your business, with key insights into rising shipping costs, additional surcharges, and how to prepare. Discover strategies to navigate these changes and minimize the impact on your bottom line.
The industry’s best shippers treat parcel spend management as a constant priority. They use data to plan, measure, optimize and monitor.
Every year, billions of dollars in small parcel shipping refunds from FedEx and UPS go unclaimed. Mindful Logistics helps companies regain control of their shipping costs and claim these refunds.
Parcel Contract Negotiations can be challenging, but strategies do exist to help shippers reduce their parcel rates.
Increase in UPS Fuel Surcharges is having significant impact on businesses and consumers.
Regular parcel auditing helps shippers identify errors, overcharges and inefficiencies on shipping invoices and carrier contracts, giving teams the power to negotiate costs with logistics partners more effectively.
E-commerce shipping costs can quickly skyrocket. A successful contract negotiation strategy can save a business money while improving service quality.
Auditing of small parcel shipping operations offers an in-depth examination of your shipping activities to detect errors that could cost money.
UPS Ground vs FedEx Ground There are a lot of similarities between FedEx and UPS package operation systems. However, there are also quite a few differences between the two giant package delivery companies. UPS uses one truck to make their deliveries and pick-ups for companies. That means they deliver and pick-up all the ground, air, and international packages in one package truck. FedEx on the other hand has 3 different trucks. They have their Express, Ground and Home Delivery trucks to service their customers. Home Delivery Trucks are used to service ground residential packages. Ground Deliveries for both companies can take over 7 days to deliver depending on your origin and where the destination delivery address is located. Both UPS and FedEx offer Ground Shipping Options to Hawaii, Alaska, and Puerto Rico from the contiguous US as well as into Canada. Urban Areas FedEx has prioritized urban areas for their deliveries. UPS also prefers urban areas where they can off load more packages and drive less miles. These urban deliveries provide the both companies with a higher profit margin on their packages. UPS operational centers service roughly a 60-mile radius from each building. FedEx does not have as many operational centers in the US as UPS requiring their drivers to travel further to service rural routes. UPS has more trucks going to rural areas than their competitor, thus doing a better job at servicing the rural areas. Is UPS or FedEx Faster? Who will deliver your ground package faster? That will depend largely on your origin zip code. If you visit www.fedex.com and www.ups.com you can search your zip code to see who has the competitive edge to servicing your customer base. The maps are in color and will show you how many days in transit it will take to deliver packages from your location around the US. From our analysis, FedEx is quicker to deliver to more areas throughout the country than their counterpart. From zip code 28405, FedEx is the faster delivery to the Northeast, Illinois, and some parts of the west coast. However, UPS was quicker to deliver to Arizona than FedEx. Your Preference At the end of the day, it is your preference on which carrier you choose to use to deliver your packages. If time in transit is a key metric for your company, comparing your customer base location in the ground transit maps offered by each carrier will allow you to choose the carrier that will help get your packages faster to your customers. Mindful Logistics utilizes our expert knowledge of the industry to offer consultation to find the perfect shipping fit for your business. Click here for a free rate analysis.
Whether you are in the e-commerce, healthcare, manufacturing, or a retail industry, there are ways you can reduce your shipping costs with UPS and FedEx. Here are some tips to avoid common errors that drive up the cost of shipping: Use the Correct Size Boxes Make sure you have the proper boxes to ship all of your products. The two main carriers, UPS and FedEx determine billing on a number of factors, and one includes dimensional weight. Dimensional weight is determined when shipping domestically, by taking the length x width x height and dividing it by 139. The carriers determine billable weight by whichever is greater, the actual weight of your box or that dimensional weight calculation. If you are putting your products in too big of a box, then you will be charged accordingly which will result in costing your company more money to ship your package to the end user. Understand and Utilize Service Levels Service Levels are extremely important to pay attention to when shipping your packages. Do you have a ground transit map from your carrier next to the computer where you process the shipping labels? If not, you may want to download one from UPS or FedEx and hang it up by your shipping station. We often see companies shipping something overnight or using the 2 day service when they could have shipped something by ground and saved a lot of money. 3 Day service shipping is only advantageous if it would take 4 days or more to ship it by ground. Otherwise, you are best to ship it using ground. If shipping International, picking the best service level is extremely important. The quickest service options will cost you more money. Communicate and Plan with your Shipping & Handling Team What commitment promises are you giving to your customers. Make sure the people that are doing the packaging and label producing understand this. If your commitment is 2 days, they need to know when to use 2nd day air verse ground shipping to get your packages to your customers. Double Check Addresses Address Corrections-This is a money maker for both UPS and FedEx. All the shipping software now have an address validation tool to make sure the address is accurate and matches up to the addresses used by the USPS. Having a means to get the address from your internal software to UPS and FedEx software to produce your labels is extremely important. If you are manually entering the addresses, the human element of error comes into play. Both UPS and FedEx offer the option to validate the address before producing the shipping label. Utilize LTL Carriers Large packages, whether by dimension or weight, must be identified. Both UPS and FedEx tack on a lot of additional fees for these oversized boxes. Having a LTL carrier or two as an option to ship these large packages is advantageous; comparing cost is important to reduce your shipping costs. In most cases shipping the large and oversized packages will be cheaper using an LTL carrier. Always Enter Package Dimensions Finally, make sure you are entering in your package dimensions when you ship each package. The carriers measure the packages once it gets into their system by the outer dimensions. I see a lot of people pre-enter their box sizes into the shipping software, but then overpack the boxes. When it goes into the carrier system their technology will pick this up. Making sure the packing tape is securely firm is also important. If the tape is flapping, the technology picks this up and your dimensions can change quite a bit. The adjustments will appear on your bill and can cost you a lot of money if you are not accounting for them. Addressing these main areas can prevent costing additional money throughout the year with UPS and FedEx thus making your business more profitable. Reach out to us for a free rate analysis to find out where you can save.
2024 General Rate Increase By now if you ship with UPS or FedEx, you have seen the 2024 general rate increase (GRI) rear its ugly head. While both UPS and FedEx said the average increase is only 5.9%, down from 6.9% for 2023; if we peel back the onion this increase could be quite substantial for most shippers. Both UPS and FedEx are penalizing shippers that use Next Day Air or Priority Overnight packages to short zones. A Zone 2 package for both carriers has an increase of at least 7.8% compared to 2023 prices. The further distance that the package travels, the increase comes down to around 6.4%. That it is still above the 5.9% GRI the carriers have stated in their press reports. On the flip side 2 nd Day Air packages are carrying a rate increase of around 5.4% up to a Zone 4 which is up to 600 miles from the point of origin. On Zones 5 and above, the increases go up to almost 7.9%. UPS and FedEx respectively have the same similar increase for their 3 Day Service. Shorter Zones have a 4.4% increase while the longer the package travels, then the increase goes up to almost 7.9%. What This Means to Me: What this tells me is that both UPS and FedEx are challenging their shippers to think very carefully before choosing what level of service they want to use. 2 nd Day Air Service is geared toward shippers that want to pay cheaper rates than overnight services, but also want their packages to arrive quicker than what the traditional ground delivery would take. So, if you are choosing 2 nd Day Air or 3 Day Select Services with UPS or FedEx for shorter zones, you are being penalized with a higher rate increase. Those packages should be shipped ground instead. Ground packages for both carriers are taking on closer to the 5.9% GRI that they said was the average increase for 2024. As the packages get heavier and travel a longer distance is when shippers should see the increases grow to well over 6%. Exporting packages to the UK, Canada or Mexico with both carriers will take on increases up 11% this year using Express Services options. FedEx was more generous with their increases to China and Japan than UPS on Express Packages. The increases are not as substantial if you are choosing a slower service that will take longer to get to its destination. FedEx had larger increases for Import packages than UPS on packages coming from China, Germany, Mexico or Japan. FedEx shippers can see increases up to 12% on those Imports compared to 2023 for their Express Service levels. UPS was a little more generous with their Import increases on Express Service Levels. However, UPS did raise those Import Package Increases from China (our countries top Import Country btw) close to 8%. Watch Out For Accessorial Charges: Accessorial charges are another way for the carriers to make large profits off your packages. What are accessorial charges? Here are some of the common accessorial charges you see on your invoices. Residential, Delivery Area Surcharge, Additional Handling, and Address Correction. A lot goes into the accessorial charges. Such as Delivery Area Surcharges. There are different fees if it is shipped ground or air as well if it is shipped to a Commercial or residential address. Accessorial fee are increasing anywhere from 1% to up to 18.5% and everywhere in between. Accessorial charges are very tricky and that is just how the carriers want it. What This Means For You: If you are novice or just do not break down the UPS and FedEx rate increase and what it will mean for your company year over year, then you will find out quick enough when the carrier says an average rate increase of 5.9% that may not mean the same to you as it does the business next door. There are a lot of games the carriers play each year with their increases. They have all the analytics on their side to know what service level, weight breaks, and zones to increase the rates the most to make the best profit for their organization. Which is smart on their end. It is what every company wishes to do. UPS and FedEx have always made it very difficult to figure out how their annual general rate increase will impact a business. They do not have the same playbook year over year. They are like a great offensive coordinator in the NFL. They are constantly switching things up to make it harder on the defense. In this case the defense is you the business that is shipping, and paying once again a lot more money to ship a package in 2024. Reach out to us if you are interested in finding out more ways you can save on shipping.
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