In December 2017 there was a significant increase in shipping rates from small parcel delivery providers. This GRI, or General Rate Increase, affects all those who ship with the major carriers like FedEX and UPS.
Oftentimes, the consensus of business owners is that these GRIs are inevitable, leaving many companies and their managers to think that they have no choice but to pay them and continue business as usual. For people that might be lamenting the impact the next GRI will have on their bottom line, it’s important to know that there are other options to consider.
Nearly all logistics and supply chain experts expect there to be a GRI for 2019, a significant increase that is now just a few months away. This means that many small-time shippers will have to pay more per shipment for each shipment they make through the major carriers. The list of carriers increasing rates includes big players in the industry such as FedEX and UPS. The reason for these increases is not usually too complicated. Inflation, cost of gas, and other factors all come together to play a role in determining what the GRI will be on any given year.
Avoiding The Annual GRI
If you are dreading the GRI that’s coming this year, then you should know that there are different ways to ship than the major carriers. For heavy volume shippers that depend upon small parcel shippers like UPS and FedEX, it might be beneficial to consider other national service providers like Expak Logistics, who specialize in carrying various parcel sizes in both regional and national capacities. The benefits of transferring a portion or even all of your shipping business to a company like Expak can make a big difference for your bottom line which, as we well know, can be difficult to sustain when rate increases put an increased strain on your profit margins.
Let’s say, for example, that you have recurring B2B shipments that will be heavily affected by the GRI this year. You don’t want to pay the GRI increases, but don’t know where else to turn except for major carriers like FedEX and UPS. What we want you to know is that you have another shipping option. With Expak you can ship nationally, just like you do with the major carriers, plus avoid the rate increase spikes that come with the annual GRI.
What many companies can consider doing in this situation is to reallocate their resources responsibly, streamlining them to be more efficient and cost effective. That way they can enjoy the best of both worlds – adequate penetration within their target revenue tier (often 10 – 15%), plus substantial savings with regional carriers in certain areas. The important thing is to calculate your discounts within each tier (regional, national, etc…) and determine the cost/benefit analysis of allocating your resources to certain companies. Sometimes the discounts you enjoy with one shipper might outweigh the savings you’ll experience by switching some of your business, and vice versa.
Other Options For Small Parcel Delivery
The point here is to be smart and do your research about where and how you ship your products. If you’re considering ways you can reallocate your resources and find new shippers that won’t burden you with a GRI like FedEX and UPS, then we’d love to talk. We can guide you through all of your shipping options, shedding light on how you can save money in certain shipping areas, especially for small parcel delivery that you’d usually leave up to the major logistics companies like FedEX and UPS.
Once you realize that there are other options for small parcel delivery, then a world of choices open up to you. This means you don’t have to just swallow the monetary hit next time the GRI comes, but be prepared to switch some of your business to other national service providers like Expak.
At Expak Logistics we can help you figure out new ways of approaching shipping, and save you money in places you might not expect to. If the GRI isn’t going to work for you, then let us work for you instead. Call us today to discuss your options for small parcel delivery.