FedEx and UPS have expressed intentions of raising ground shipping rates in 2015. Both companies are preparing to incorporate dimensional weight pricing for all parcels utilizing U.S. ground service next year. The new policy change will essentially incorporate the amount of space a parcel takes up on a truck into the overall pricing, in some cases placing more emphasis on volume than a package’s actual weight. This pricing method has traditionally been reserved for large packages, typically larger than three cubic feet, as well as for air and express deliveries which can be quite costly. As a result, ground shipments have remained the least expensive option for many American businesses. The change is expected to affect roughly a third of all FedEx ground business and could increase rates for shippers up to 30 percent.
Many operations may seek to change packaging size and shapes to avoid steep increases in their cost of operations, but there may also be another option for businesses with less flexibility or control over their product packaging. The United States Postal Service (USPS) recently announced their plans to lower the cost of Priority Mail shipping for businesses. The USPS hopes to encourage more businesses to choose the USPS for their shipping needs over their private competitors and raise the USPS’s profile in the commercial shipping industry. The USPS decision comes much to the dismay of private sector shipping service providers, as FedEx and UPS have outwardly spoken out against the rate decrease which goes into effect September 7th, 2014. FedEx representative have reportedly told the Postal Regulatory Commission (PRC) that by decreasing their Priority Mail shipping prices, the U.S. Postal Service is threatening the private sector’s ability to compete for commercial and e-commerce business.
Experts suggest that depending on the shipping parameters, businesses can save upwards of 50 percent per 9-22 pound package by shipping through the U.S. Postal Service. This could be great news for Orlando businesses looking to cut costs and maintain their bottom line in the hyper-competitive e-commerce economy.
At Newman Crane, we understand that cost is a huge factor in business decision making, and balancing quality with cost efficiency is always a challenge. That’s why we are dedicated to providing quality Orlando business insurance solutions at highly competitive rates. Our commercial insurance specialists have experience working with all types of businesses, large and small, implementing risk management strategies that protect our clients from the countless exposures they face on a daily basis. From developing an employee benefits strategy to complete property and liability coverage options our Orlando business insurance specialists can devise a comprehensive plan to protect all your business assets. To get started, give us a call today at (407) 859-3691.