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Oct
20
By Michelle Marasca / www.parcelindustry.com / October 19th, 2017

November and December can be the two most profitable months for e-commerce companies, resulting in shipping volume increases and driving 30% more e-commerce revenue than any other time of year. The optimal customer experience is receiving your package on time and without damage. Learning important shipping tips can help reduce any negative customer experience.

Successful practices and tips for the holiday season include: proper packaging, adding shipping insurance, avoiding surcharges, and taking note of key shipping dates.

Proper Packaging
Theft and damage is an ongoing problem for both commercial and individual shippers, especially during the holidays. Some important tips to remember are:

  • Don’t draw attention to your package. Descriptive boxes and labeling are an easy target for would-be thieves. By removing your company name from the return address, it makes it harder for thieves to determine the contents inside. Suggestions would be to use your initials or “Shipping Department.”
  • Complete package scanning. Use a mode of delivery that provides detailed tracking information revealing the complete status and position of your shipment.
  • Make sure labels are securely attached to your package. Labels that are not properly affixed can stick to other packages in transit, and this is a common way for the package to disappear.
  • Use a strong packing box and package your contents securely. A box with low burst strength is an accident waiting to happen. Use plenty of bubble wrap.

Adding Shipping Insurance

As the 2017 holiday shopping season approaches, online sales are expected to increase by 15.8%. This impressive growth, in turn, will equate to more packages being shipped and delivered. The rise in package volume can cause substantial delays in delivery times, increased handling issues, and pilferage. Obtaining shipping insurance this holiday season will be crucial in covering your packages against damage, loss or shortage. Some insurance will even cover your shipping costs.

After all, with billions of packages being delivered during the holidays and carriers hiring temporary seasonal employees, mistakes can happen. It is important to add shipping insurance to cover damage, loss, and shortage while in transit. Keep in mind there is a difference between carrier insurance and third-party shipping insurance; the carriers often have fixed pricing for all shippers and a tedious claim process. Most third-party shipping insurance companies offer lower rates than the carriers and expedited claims processing. Third-party companies will also give you a more “VIP” experience, flexibility in coverage, and no hold time when you call in… Let’s face it, this is important!

Avoiding Increased Surcharges
Avoid waiting till the last minute to get your orders shipped to your customers. Stay current on carrier surcharges and handling charges to eliminate additional unneeded costs.

UPS rolled out new pricing for the peak holiday shipping season:

  • UPS will add a 27-cent surcharge on all packages shipped via Ground Residential from November 19 to December 2.
  • UPS will also add a surcharge from December 17-23.

FedEx is not adding additional holiday residential surcharges as UPS is doing but will add increased handling surcharges from November 20 to December 24, 2017.

Important Shipping Dates
Listed below are the important deadlines from popular shipping carriers to ensure your packages are delivered:

UPS:

  1. Dec 18: Deadline for 3-Day Select shipments.
  2. Dec 22: Deadline for 2nd Day Air shipments.
  3. Dec 23: Deadline for Next Day Air shipments.

USPS:

  1. Dec 15: Deadline for Standard Parcel Post (Mail) shipments.
  2. Dec 20: Deadline for First Class Mail and Priority Mail shipments.
  3. Dec 23: Deadline for Priority Express Mail shipments.

FedEx:

  1. Dec 12: Deadline for Smart Post shipments.
  2. Dec 17: Deadline for Home Delivery and Ground Delivery shipments.
  3. Dec 20: Deadline for Express Save shipments.
  4. Dec 22: Deadline for 2-Day and 2-Day A.M. shipments.
  5. Dec 23: Deadline for Standard Overnight, Priority Overnight, First Overnight shipments.
  6. Dec 25: Deadline for Same Day shipments

Day

Date

Holiday

UPS

USPS

FedEx

FedEx Ground

Thursday

Nov. 23

Thanksgiving Day

closed

closed

closed

Saturday

Nov. 25

Saturday after Thanksgiving

closed

Sunday

Dec. 24

Christmas Eve

closed

closed

closed

closed

Monday

Dec. 25

Christmas Day

closed

closed

closed

closed

Sunday

Dec. 31

New Year's Eve

closed

closed

closed

closed

Monday

Jan. 1

New Year's Day

closed

closed

closed

closed

Don’t count on a holiday miracle to ensure that your packages arrive safely. Protect your packages against damage, loss, and shortage by choosing the correct, nondescript packaging and then simply adding shipping insurance. Give yourself peace of mind.

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Oct
17
By DC Velocity Staff / www.dcvelocity.com / October 16th, 2017

Transport and logistics giants donate cash and transportation services to aid survivors of Maria, Irma, and Harvey.

Transport and logistics giants FedEx Corp. and UPS Inc. have stepped in to provide extensive disaster relief aid packages and support following the epic trio of storms that ravaged a half-dozen U.S. Southeast states and Caribbean islands in August and September and the earthquakes that rattled Mexico in September.

Memphis, Tenn.-based FedEx has pledged $3 million in cash and transportation support, leveraging its logistics network to help numerous relief agencies respond to the disasters. The company works with the agencies to deliver supplies such as water treatment systems, blankets, cleanup kits, and comfort kits, FedEx said.

Atlanta-based UPS also announced wide-ranging disaster relief initiatives, including a commitment of $2 million in aid. In addition, the company flew air freighters to Puerto Rico under contract with the Federal Emergency Management Agency (FEMA) to deliver Meals, Ready to Eat (MREs) to victims and is coordinating with the International Federation of the Red Cross and Red Crescent Societies (IFRC) to deliver tarps, hygiene kits, mosquito nets, liquid containers, and shelter tool kits to storm survivors in Cuba.

"Hurricanes Maria, Irma, and Harvey, together with the earthquake in Mexico, have left behind an almost unprecedented need for humanitarian aid throughout the Caribbean and Southeastern U.S.," said Eduardo Martinez, president of The UPS Foundation, in a statement. "When the International Federation of the Red Cross called to request assistance ... we knew how important it was to answer that call."

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Oct
17
By Kurt Ruppel / www.iwco.com / October 10th, 2017


This past Friday, the Postal Service filed 2018 postage rate proposals with the Postal Regulatory Commission (PRC) for both its Market Dominant and Competitive products, which will take effect on January 21, 2018 (assuming PRC approval). The PRC will now review the Market Dominant rates to ensure they are within the legally mandated inflation-based rate cap. The PRC will also review the Competitive rates to confirm they cover the costs of those products. The PRC’s ruling is expected in about six weeks—probably just before Thanksgiving. Let’s explore what this all means and how it may impact your 2018 direct mail budgets.

Impact on Competitive Products

Competitive postal products include expedited services like Priority Mail, parcel shipping services, and international mail options such as International Priority Airmail (IPA) and International Surface Air Lift (ISAL). These products will generally see a 3.9% price increase, with the Postal Service’s bulk ground shipping products Parcel Select (4.9%) and Parcel Select Lightweight (7%) seeing the highest increases.

2018 Postage Rates for Market Dominant Products

Market dominant postal products include First-Class Mail, USPS Marketing Mail (formerly known as Standard Mail), as well as Periodicals, and are the rates most often used by marketers. Increases in these rates are controlled by an inflation-based price cap applied at the class level. This means that although the average increase for both Marketing Mail and First-Class Mail is about 1.9%, individual rate cells within each class can see changes that vary from the average as long as the result is within the rate cap when they are combined with all other mail in that class.

The 2018 postage rate proposals are relatively simple compared to the 2017 changes, reflecting the empty seats on the Postal Service’s Board of Governors. The last remaining presidentially appointed governor approved a January 2018 rate increase before he left office in December 2016. Given the time lag between that approval and the effective date of the increase, the approval was simply for a within-the-cap increase without any changes to the rate structure.

Looking More Closely at Letter Mail

First-Class Mail commercial letter rates are increasing about 1.25%, while single-piece rates are up a little over 2%. The number that will be in the news is that a Forever Stamp will now cost 50¢.

Marketing Mail letters are more of a mixed bag. The Postal Service announced last year it had been overestimating the cost savings that destination entry provides for letter mail. For this reason, it continues to realign the relationship between SCF-, NDC- and origin-entered mail. Destination entry discounts for SCF-entered letters are currently $31­–$34/M, depending on tier. The 2018 proposed rates cuts discount to $28–$31/M. Marketing Mail letters commingled to the 5-digit level and entered at the SCF will see an increase of 1.4%, slightly below the class average, with NDC- and origin-entered mail seeing smaller increases.

SCF-entered walk-sequence carrier route Marketing Mail letters will see higher than average increases of 2.0%–2.4%, with NDC- and origin-entered mail again seeing smaller increases.

Nevertheless, keep in mind finely-sorted, drop-shipped mail still provides the most advantageous postage prices, even if some of the relationships between tiers is changing. In addition, 2018 postage rates for many tiers of drop-shipped Marketing Mail letters and commercial First-Class Mail letters remain below the level of corresponding rates in early 2016 when the exigent surcharge was in place.

Your IWCO Direct account team can help you take a closer look at how the proposed 2018 postage rates may affect your marketing budget. Ask them for an analysis today.

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Oct
17
By Jennifer McKevitt / www.supplychaindive.com / October 16th, 2017

Dive Brief:

  • The United States Postal Service (USPS) will work with the University of Michigan on an autonomous mail delivery truck, American Shipperreported last week. The USPS intends to introduce a swarm of the small self-driving trucks on rural routes across the country by 2025.
  • In one possible scenario, a postal worker would sit behind the wheel, sorting mail and doing other tasks as the truck moves along the established route. Rural areas are first for consideration due to the lower accident rate as a result of less traffic.
  • The USPS' Office of the Inspector General (OIG) wrote in a recent reportdesigning autonomous vehicles will add only $7,000 to $10,000 to the purchase price by 2025 and just $3,000 by 2035. However, those cost increases would be offset by savings on fuel.

Dive Insight:

Last mile inefficiencies have long plagued logistics; is an autonomous vehicle serving a government agency likely to solve the problem?

The USPS has the challenging task of stopping house by house, building by building on a never-ending basis. While logistics providers like FedEx and UPS have some distance between stops, the post office bears a greater burden and therefore may benefit most from the implementation of an autonomous vehicle. Though most delivery pundits see trucking as the likely progenitor of road-ready self-drivers, it's entirely possible that the post office will beat them to the punch out of sheer necessity.

The OIG report reveals the USPS is considering three stages to the implementation of autonomous vehicles within its fleet. The first phase is underway, as the University of Michigan is set to deliver a prototype to the USPS by December 2017. In Phase 2, the agency will partner with a manufacturer to pilot autonomous delivery trucks in 10 rural routes. Then, between 2022 and 2025, the USPS plans to deploy autonomous vehicles on 28,000 rural routes.

Yet, challenges remain for the development of autonomous vehicles, despite promises by automakers across three continents. "The industry is still perfecting the foundational pillars of the technology; sensors still have problems seeing through bad weather, for instance," the OIG states in its report.

Nonetheless, the USPS is optimistic about the technology's future. "We see possibilities from each of the seven use cases and the trucking applications outlined that will increase customer satisfaction and cut costs," USPS Vice President of Delivery Operations Kevin McAdams wrote in a letter to the OIG. "We are in agreement of opportunities autonomous vehicles present and have began considering changes with our logistics."

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Oct
12
Source: FedEx / www.fedex.com / October 12th, 2017

FedEx is now conducting standard daily operations in the south central and southeastern regions of the U.S., and most areas of the U.S. Virgin Islands and Puerto Rico recently affected by Hurricanes Maria, Irma, and Harvey. Previous hazardous conditions across the areas have subsided, and FedEx is now back to standard daily operations.

Note that some isolated areas in the U.S. Virgin Islands and Puerto Rico remain inaccessible because of local conditions.

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Oct
11
By Jeff Berman / www.logisticsmgmt.com / September 20th, 2017

First quarter net income at $596 million was down 16% annually, with earnings per share at $2.19, which is 17.4% below last year’s $2.65 and below Wall Street estimates of $3.09.

The impact of the NonPetya cyber attack and to a somewhat lesser degree that of Hurricane Harvey each had a negative impact on fiscal first quarter earnings for transportation and logistics bellwether FedEx, the company said late yesterday.

First quarter net income at $596 million was down 16% annually, with earnings per share at $2.19, which is 17.4% below last year’s $2.65 and below Wall Street estimates of $3.09. The June 27 cyberattack, which affected FedEx subsidiary TNT Express, dropped EPS by $0.79, with Hurricane Harvey accounting for $0.02 EPS. Operating income for the quarter at $1.12 billion was down 9.7%, and net margin at 7.3% was off 9.9%.

“The TNT Express cyberattack and Hurricane Harvey posted significant challenges to our operations in the first quarter,” said Fred Smith, FedEx chairman and CEO on the company’s earnings call yesterday. “I strongly believe FedEx will emerge from the cyberattack as an even stronger more resourceful company and I would like to thank the thousands of FedEx team members who work tirelessly to remediate the TNT systems problems and take care of our customers. We are confident of our prospects for long-term profitable growth. We reaffirm our commitment to improve our operating income at FedEx Express but -- the segment by $1.2 billion to $1.5 billion in fiscal 2020 versus fiscal 2017.”

Individual unit quarterly performances:

FedEx Express revenue, which includes TNT Express, was flat at $8.65 billion, and operating income dropped 16.9% to $433 million. FedEx cited revenue growth from higher U.S. domestic package base rates and solid international package growth that it said was partially offset by the impact of the TNT Express cyberattack. And it said that operating income was off by an estimated $300 million, due to the cyberattack as well.

Total quarterly package revenue was up 4% at $6.633 billion, with U.S. package revenue up 3% at $3.078 billion and total international export package revenue up 4% at $2.511 billion.

Total average daily packages at 5.796 million were up 2%, with total daily U.S. domestic packages down 1% at 2.621 million and revenue per package up 2% at $17.61. Total daily international export packages at 754,000 were up 2%, with international domestic up 5% at 2.421 million.

FedEx Ground revenue headed up 8% to $4.64 billion, and operating income rose 3% to $626 million. FedEx noted that revenue rose due to average daily package volume increasing by 4%, coupled with higher commercial service base rates.

FedEx Freight, the company’s less-than-truckload segment, saw revenue head up 6% to $1.75 billion, with operating income up 30% at $133 million and a 1.9 point gain in operating margin to 10%. FedEx attributed the gains to higher base rates, increased weight per shipment, and higher fuel surcharges, with average daily LTL shipments up 1%, as the company continues to focus on revenue quality.

Addressing the TNT cyberattack on the earnings call, FedEx EVP and CFO Alan Graf said the attack resulted in a significant business interruption and financial impact. And he added that FedEx estimates the cyberattack reduced FedEx Express first quarter operating income by approximately $300 million or $0.79 per diluted share.

“Because our intra-European domestic businesses recovered more quickly, the impact from lost revenues was and continues to be more heavily weighted towards our higher-yielding international shipments, resulting in a more pronounced impact on profits.

It is taking longer to restore our international business due to the complexity of clearance systems and business processes,” he said. “We are now focused on finalizing the restoration of certain key customer specific, specialized solutions and systems in time for the peak season. While significant progress has been made on restoration of our operations and IT systems, TNT revenues, volumes and profits remained below pre-attack levels. As we look ahead to the remainder of FY18, we expect to experience ongoing but diminishing financial impacts from the cyberattack in the form of lower revenues and higher investments to further improve and strengthen our IT infrastructure.”

FedEx Executive Vice President, FedEx Information Services and CIO Rob Carter said on the call that the FedEx global IT teams have been working to rebuild the TNT technical environment to be more resilient.

“As a result, the TNT security posture is much improved,” he explained. “Leveraging every available resource, we have restored the TNT systems to a near normal state with virtually all critical systems up and available.We are now focused on the restoration of certain key customer specific solutions and systems. We expect these IT capabilities to be restored by the end of September, enabling business as usual operations with full capabilities across all customer segments. At the time of the attack, there was already work underway to replace TNT legacy systems with FedEx technology. In the wake of the attack these efforts been accelerated. We’ve hardened all of TNT servers and workstations, introduced additional network security controls, rebuilt active directory and have started enhancing the segmentation of the TNT network.”

On the economic front, Raj Subramaniam, FedEx Executive Vice President and Chief Marketing and Communications Officer, said that FedEx continues to see moderate growth in the global economy.

He observed that the FedEx calendar year 2017 U.S. forecast is mostly unchanged and reflects solid consumer spending and a rebound in industrial activity. On the international side he said recovery and capital spending is supporting higher global GDP growth and driving the best trade volume growth since 2011.

As for peak season, specifically on the pricing side, he said that FedEx is taking a “surgical” approach to how it manages peak surcharges in the form of oversized packages and pricing programs for the small number of large retail and e-tail customers that drive the surge in peak deliveries.

“FedEx will not apply holiday season surcharges except for packages that are oversized and authorized are require additional handling,” he said. The pricing programs for large customers are designed to provide incremental capacity during peak, while including some protection for FedEx if they come in below volume projections. By focusing on these two areas and applying the peak oversized package surcharge during the entire peak season, we expect to capture incremental revenue. Our approach properly aligns revenue with our incremental peak investments without burdening our millions of loyal small business customers with the holiday delivery residential surcharge. We are beginning a national marketing and sales campaign to ensure customers are aware of our peak pricing and we expect profitable volume gain and brand loyalty benefits.”

While the primary focus of the FedEx call centered in the cyberattack, on the TNT book of business, Jerry Hempstead, president of Hempstead Consulting, said that the good news is that the attack rendered many TNT systems useless and not worth salvaging and will speed up the process to migrate customers onto FedEx platforms now rather than later.

“Unsaid on the call was the damage done to customer relationships when customers were forced to scramble and convert their business to UPS or DHL because TNT systems were down,” he said. “These customers are not going to be in a hurry to now convert back to FedEx unless they are given a major financial incentive to do so. Some may never return. People are just not going to flip back because FedEx now says everything is back to ‘almost’ pre-attack levels. The ‘almost’ word was used so many times on the call it should leave one wondering what exactly that means, and it appears FedEx IT is still writing programs to get specific customers back on board with a seamless processes.

FedEx has deep pockets and will weather this but I suspect there are some in Memphis who might now regret the TNT acquisition. FedEx is going to have to put their selling shoes on for the next few quarters to bolster at least the top line.” 

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