Rate increases from UPS and FEDEX

set for Jan 4, 2010

[jsinger]

Rates to soar again on January 4th

[ups.com...]
[fedex.com...]

[edited by: lorax at 12:42 pm (utc) on Dec. 31, 2009]

[jsinger]

4.9% is a painful increase in a weak economy that's nearly devoid of inflation.

Raises the vital question of how much longer will most commerce sites routinely give free shipping with about $100. I see some sites now offering free shipping with $129 or such.

[gpilling]

UPS freight is going up 5.7% according to their cheerful letter this week.

[dpd1]

Wonder if that's going to carry over to the PO as well.

[trinorthlighting]

Youch! It might be time to explore the USPS flat rate shipping boxes.

[dpd1]

I see that USPS is going to raise rates as well. Love how they do it all at the exact same time. Looks to be about .60 per on the Priority. Not the end of the world... Just a hassle to recalculate. I would love to see the stats on how many people use the flat rate box on destinations that are actually lower than the flat rate. I figure there's got to be a reason why they plug those so much. I also notice that most of the supplies they set out now are just the flat rate... Knowing that people will probably just grab that and not even bother to see if it's more economical or not.

[smartwork]

We tested Flat Rate Boxes years ago, and there were only about two products that we had that were small and heavy enough to make the boxes/rates work. Other than those, every time we would have over-paid if we had used them. They are probably just the ticket for those who want to focus on convenience and not maximizing profit. If anyone is exploring USPS and hasn't heard of Endicia, you may check it out.

[creeking]

I've noticed that, too. In several post offices. I ask for a priority box "not the flat rate boxes" and get pointed to the flat rate boxes anyway. yeah, the flat rates say priority on them.

a couple places kept the standard priority boxes "in the back" and had to go find one for me. I may ask for a bundle of them to be shipped to me.

[Nobias]

So it's also the start of real inflation.

I hardly ever buy small items online anymore (<$50) due to high shipping costs; who wants to pay $30 for an item and $15 for shipment? $15 gives me 5+ gallons of gas, which gives me 130 miles. I can visit all local stores within 20 miles radius for that.

[jsinger]

"So it's also the start of real inflation"

Good point. And the gov't doesn't care because those big increases by UPS and Fedex give the USPS room to raise prices and perchance survive longer.

What the heck is in shipping that's gone up so much in the past year? Surely not wage increases.

[caine]

I've been watching UPS's international rates shout up over the last year, and another little stunt was changing their volumetric from 6000 to 5000 which makes shipping alot more expensive in the Asia Pacific / Oceania region - approximately 3 times the price of TNT on most ships.

[HRoth]

The flat rate boxes seem to be put forward the same way stamps are by the PO--they are counting on them not being used to their full value. The workers at my post office have told me outright that they are supposed to push the flat rate boxes and that they have very few of the variable rate priority mail boxes. You pretty much have to order them online. They have decreased the choices in size for the variable rate also. The small video box was perfect for most of my shipments, but they got rid of it recently. And unless you call them and order them by phone, you will be waiting weeks for those boxes to come.

[moltar]

You guys complaining about shipping prices, check us, the next door neighbours, Canadians. UPS and FedEx here are simply retardedly expensive. That is why there is barely any online business in Canada. I tried to play nice, but eventually had closed my shop completely, because it is impossible to compete with US.

[subhankar ray]

Is your friendly local Amazon store coming next to Walmart? Just curious..

[dpd1]

Usually I don't have to wait too long for them to send the boxes. I just went through the whole list a while back and basically ordered some of every version they had. I got tired of always not having what I need. About 2/3 showed up in a week, the rest about 5 days later. The PO person gave me a dirty look when they hauled it all in, but tough. Considering the cost of boxes, it's not a bad deal to have to wait a while. I've probably saved thousands in box costs.

[gpilling]

You guys complaining about shipping prices, check us, the next door neighbours, Canadians. UPS and FedEx here are simply retardedly expensive. That is why there is barely any online business in Canada. I tried to play nice, but eventually had closed my shop completely, because it is impossible to compete with US.

You may want to check out this thread - [webmasterworld.com...]

We in the US have a hard time shipping effectively to Canada.

[PCInk]

What the heck is in shipping that's gone up so much in the past year? Surely not wage increases.

I am unsure what fuel prices are in the US, but in the UK petrol/gasoline/diesel has risen by a significant amount in the last year. Could this account for the increase in shipping costs?

Over here, a couple of years ago, the Royal Mail increased their prices and changed their structure for pricing. For sending goods, the price was increased between 200% and 300% for most packages (I haven't mistyped that!). When there is little alternative other than to raise prices or shipping prices to customers, it does make you panic a little, but you have to remember this doesn't affect only your business but that of your competitors too.

Even the shops are affected (to a lesser degree) that they have to pay (directly or indirectly) for the shipping of goods to their store.

[rise2it]

"I would love to see the stats on how many people use the flat rate box on destinations that are actually lower than the flat rate. I figure there's got to be a reason why they plug those so much."

-----------

Only people who are bad at math.

[rise2it]

Here's a nice trip down memory lane...

When I started online in the late 90's, Priority Mail - up to 2 pounds (to anywhere in the USA) - was a whopping $3

Now, the flat rate ($4.80) is only for up to a pound, and with zones included now, that same 2 pound package can cost more than $9 to ship, depending on where it goes to.

People will pay HIGH shipping costs for wants (think Christmas candy) - they won't pay it for other things.

[Gomvents]

rise2it, what makes you think flat rate is only up to a pound? It's up to something like 75 pounds... that's the whole point of the flat rate packages, to not stress over the weight of the package or where it's going - only focus on whether you can fit the item in the box. We ship USPS exclusively and found the flat rate boxes to be great in a lot of cases. We use Endicia to know exactly which box makes sense in each case.

[pageoneresults]

This is usually a time when small local carriers pick up new business. I worked with one for years. I remember when they first came on the scene with their obscenely low rates for California shipments. They went from being a 3 truck firm to a full blown cartage agent.

I think UPS and FedEx are thinking that we as merchants will continue to offer Free Shipping and just absorb the increases. We're better off offering discounts and leave shipping as is. That whole Free Shipping is too volatile and after these increases, I sure hope many will take a look at their practices in this area and make adjustments where necessary. If you don't, you're going to lose your shorts as they say.

So, UPS and FedEx business is down? And they both decide to increase rates to compensate for the losses? Ya, that's what they are doing. Are these two in collusion?

On a side note, I have two clients that have switched to USPS exclusively unless an overnight shipment is required which is rare these days given costs involved.

Address Verification Services are going to be hot commodities in 2010. Actually, they have been for quite some time, they'll just get a little more play now.

[gpilling]

I think UPS and FedEx are thinking that we as merchants will continue to offer Free Shipping and just absorb the increases. We're better off offering discounts and leave shipping as is. That whole Free Shipping is too volatile and after these increases, I sure hope many will take a look at their practices in this area and make adjustments where necessary. If you don't, you're going to lose your shorts as they say.

Free shipping also penalizes the customers closer to you. I am in Arizona so the shipping cost on one of our items (50 pounds) might be $20 to California and $50 to the east coast. It is a tough decision to weigh the extra sales you might get from "free shipping" vs. the sales you lose because your bundled price is $30 too high. We have been switching to the actual shipping cost model during our change to more of a local bricks and mortar operation. Makes things easier for local business.

The USPS flat rate boxes we use to our advantage where we can - on one popular item we can offer free global shipping, which has meant a few thousand in sales to the middle east. Too bad more of our items won't fit into the flat rate boxes.

[dpd1]

Of course UPS, FedX and USPS are in collusion. No such thing as price fixing in large industries... Yeah right. This is how economies just get worse instead of better. Things get bad and most people lower rates and make better deals. Large companies go... "Oh wow... We only made #*$!x millions instead of #*$!x millions this year... Lets raise the rates".

Personally, I don't see how anybody does the free shipping. Nobody I buy stuff from does free shipping... On the contrary, they charge to the max. I just had a guy charge me over $18 for a 6" box less than a pound, with $36 of stuff in it. With material vendors doing stuff like that to me, I sure can't give customers free shipping. Why should I be the one to take the hit all the time.

[Future]

Move to Blue Dart ? (like google)