#United States #Irvine #Reveel #Shipping Intelligence #Parcel Spend

Understanding the New Era of Shipping Costs for U.S. Businesses

As we head into 2025, businesses in the United States must brace for a significant transition in shipping costs due to recent announcements from FedEx and UPS regarding their annual General Rate Increases (GRIs). According to Reveel, the leading Shipping Intelligence™ Platform, the average GRI is set at 5.9%. However, the real impact could be much greater, depending on various factors affecting each company's shipping profile.

Key Insights from Reveel’s Analysis

Reveel's in-depth analysis provides crucial insight into how this year's rate hikes will affect different sectors. Josh Dunham, the co-founder and CEO of Reveel, emphasizes that companies involved in e-commerce and those reliant on swift supply deliveries are acutely aware of how parcel shipping performance influences their bottom line.

Historically, GRIs have posed challenges to shippers, as they primarily reflect increases on published rate cards and fail to address other revenue-raising strategies employed by carriers. These strategies include new fee categories, changes to parcel dimensions, and other rules that can significantly alter shipping expenses. Furthermore, many companies lack transparency regarding their parcel shipping spending, complicating efforts to manage costs effectively.

Reveel's innovative PSM 2.0 technology provides an essential tool for shippers. By leveraging AI-driven insights and comprehensive shipping data, businesses can now obtain real-time analytics and actionable intelligence to make informed cost-saving decisions.

The 2025 Shipping Landscape

The impending GRIs represent a notable shift from patterns observed in previous years. For instance, UPS clients maintaining the same shipping habits as last year will see costs rise by an average of 6.3%, while FedEx customers could face a 7.0% increase under similar circumstances. These changes indicate a more direct correlation between the announced GRIs and actual shipping costs—a stark contrast to prior experiences where companies often encountered larger than expected increases due to hidden variables.

Moreover, both shipping giants have been gradually adjusting their rates throughout the year, particularly targeting heavier or bulkier items to realign with dynamic pricing strategies.

Crucial Considerations for Shippers

Shippers must pay close attention to certain key factors as detailed in Reveel's 2025 GRI Guide:

• - FedEx Clients: Those located on the U.S. East or West Coast, heavily using 2-day or 3-day services, or dealing with parcels averaging ten pounds may find themselves disproportionately impacted by these changes. Furthermore, companies where surcharges exceed 20% of shipping costs will also feel significant pressure.
• - UPS Clients: Similarly, customers relying on expedited shipping, particularly for light packages or 2-day services, should be prepared for steep hikes, with surcharges potentially comprising over a fifth of their total logistics budget.

Additionally, the impending peak season for 2024 appears more demanding and costly. UPS has begun implementing a 2% surcharge on invoices settled with credit cards, further complicating the financial landscape for shippers.

Moving Forward: Strategies for Success

Dunham warns that it is vital for businesses to analyze their unique shipping profiles and proactively address upcoming changes. Factors to consider include:

• - Negotiating Carrier Contracts: Understanding the nuances of each carrier's contract can help companies leverage better rates.
• - Reassessing Packaging Solutions: Optimizing packaging can also reduce dimensional weight costs.
• - Multi-Carrier Strategies: Implementing a diverse shipping approach may provide more flexibility and cost savings.

In conclusion, 2025 will prove challenging for shippers, demanding a focused response to the reshaped landscape of parcel shipping. Proactive engagement with available data, strategic planning, and a clear understanding of the changes at play will be crucial to navigating this new era of shipping costs effectively. To arm themselves against potential pitfalls, shippers can access Reveel’s comprehensive 2025 GRI Rate Guide or sign up for a demo of their innovative Shipping Intelligence platform today.