2011 Rate Increases from Fed Ex and UPS

The 2011 rate increases from Fed Ex and UPS in their words....


From the Fed Ex Website:

FedEx Ground to Increase 2011 Rates


December 3, 2010

FedEx Corp. (NYSE: FDX) will increase shipping rates for FedEx Ground and FedEx Home Delivery by a net average of 4.9% effective January 3, 2011.

The FedEx Ground and FedEx Home Delivery full average rate increase of 5.9% will be partially offset by adjusting the fuel price threshold at which the fuel surcharge begins, reducing the fuel surcharge by one percentage point. FedEx SmartPost rates also will change.

FedEx previously announced on Sept. 29, 2010 that it will increase shipping rates for FedEx Express also effective January 3, 2011 and that FedEx Express and FedEx Ground will implement a change to the dimensional weight volumetric divisor from 194 to 166 for U.S. domestic services.

Details of dimensional weight charges, surcharge changes and new rates can be found at www.fedex.com/us/2011rates.

 
From the UPS Website:
 
2011 Rate Change Information


Next year, the published rates for our services will be increasing, however, the value we offer through our innovative products and logistics know-how can help you be more competitive, serve your customers better, and grow your business. These rates go into effect January 3, 2011.

Package

UPS Ground services will increase a net 4.9% through a combination of a 5.9% increase in rates and a 1% reduction in the UPS Ground services fuel surcharge.

UPS Air and International services will increase a net 4.9% through a combination of a 6.9% increase in rates and a 2% reduction in the UPS Air and International services fuel surcharge.

Visit ups.com/rates starting January 3, 2011 to view the complete 2011 Rate and Service Guides.

Dimensional Weight Calculation Change

Beginning January 3, 2011, the divisor used to calculate dimensional weight will change.

U.S. Domestic UPS Air services will change from 194 to 166.

U.S. Domestic UPS Ground services will change from 194 to 166 (applies to packages 3 cubic feet or larger in size).

Export services from the U.S. (all services) will change from 166 to 139.

UPS Standard to Canada will change from 166 to 139 (applies to packages 3 cubic feet or larger in size).

Import to the U.S. from Canada and Virgin Islands will change from 166 to 139.

Dimensional weight for international multiple package shipments will be based on the greater of the actual weight or dimensional weight of each package in the shipment.

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Learn more about small package shipping, ecommerce order fulfillment and logistics software.

An update on the BTS Freight Index

From 3PLnews.com: An update on the BTS Freight Index:

BTS Releases Freight Transportation Services Index (TSI); Freight Index Rose 0.2% in October from September 2010



http://bit.ly/ekqn2I

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Trucking Pricing Trends11/21/10

Here is an update on fuel prices as of 11/21/10.

From the US Energy Information Administration - the projected average annual retail fuel prices are detailed in this link.

Link to: Detailed snapshot of current fuel indices from the EIA.

Freight Transportation Services Index (TSI) increased in June.
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Freight Transportation Services Index Increased

Compared to September 2009, the Freight Transportation Services Index (TSI) was up 2.1 percent, the first year-over-year rise in September since 2006. The index is down 0.9 percent from December 2009 through September 2010.


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Truckload Pricing and Fuel Trends

Here is an update on fuel prices as of 10/20/10.

From the US Energy Information Administration - the projected average annual retail fuel prices are detailed in this link.

Link to: Detailed snapshot of current fuel indices from the EIA.

Freight Transportation Services Index (TSI) increased in June.
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Sponsored by www.eroutingguide.com - check out the free truckload rate calculator.

Update on Truckload Pricing Trends - 9/18/10

Here is an update on fuel prices as of 9/18/10.

From the US Energy Information Administration - the projected average annual retail fuel prices are detailed in this link.

Link to: Detailed snapshot of current fuel indices from the EIA.

Freight Transportation Services Index (TSI) increased in June.
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Sponsored by www.eroutingguide.com - check out the free truckload rate calculator.

Truckload Pricing and Fuel Trends Update

Here is an update on fuel prices as of 8/14/10.

From the US Energy Information Administration - the projected average annual retail fuel prices are detailed in this link.

Link to: Detailed snapshot of current fuel indices from the EIA.
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Sponsored by www.eroutingguide.com - check out the free truckload rate calculator.

Fuel Surcharges make up 40% of your logistics costs - know how they work

Fuel Surcharges make up 40% of your logistics costs – you need to know how they work
Around 10 years ago is when fuel surcharges became ubiquitous. Prior to that time, the cost of fuel was always there of course, but in those days shippers essentially paid for fuel as a part of their linehaul rates. The market changes in fuel costs were for the trucking companies to worry about. The impact of fuel was something left to maybe negotiate at year’s end, or perhaps as part of a contract renewal. The shipper’s perspective was that managing fuel costs were a trucking company’s problem to understand and account for. Since that time, the burden of dealing with market changes in fuel costs has shifted from the trucking companies to shippers.

With fuel surcharge making up 30-40% of a typical company’s logistics costs it important for managers in both operations and finance to know how fuel surcharges are calculated and how the diesel market affects their freight spend. These days shippers are directly exposed to the potentially budget crushing fluctuations in fuel costs and the curiously structured surcharge matrices. Theoretically the fuel surcharge tables that most carriers use are a direct representation of actual fuel costs to calculate the fuel surcharge but I have yet to be given an explanation that makes me feel comfortable that the matrices are more than just an extension of a carrier’s line haul costs. This is not to say that fuel costs are not a major cost factor for carriers, I just disagree that the tables represent the impact of fuel accurately for a carrier from an operating perspective. There is too great of a difference from carrier to carrier for it to be a true representation. This tells me there is a “fudge” factor built into the numbers allowing carriers to hide operating costs beyond just fuel in the fuel surcharge matrix.

For small package shipping, companies are at the mercy of UPS and Fed Ex for not just air and ground services and pricing, but to both company’s own fuel surcharge tables. There is not a lot to understand about small package fuel surcharge other than to know you have to think of the cost as an extension of their pricing and pay attention as the fuel prices change – for better or worse.

For truckload and LTL shipping, you’ll see fuel surcharge matrices calculated as both a per mile and a percentage of line haul cost basis. In both cases – the fuel surcharge table will be based on the US Governments Diesel Fuel Index (posted on the DOE website). It is updated weekly and is also calculated on a regional and national basis. Depending on the footprint of your trucking company either type of fuel index could apply. The “per mile” basis is simply calculated by adding the per mile charge on top of your line haul rate, then multiplied by the number of miles shipped. The “percentage” type surcharge takes the cost of the shipment (for LTL, the discounted tariff rate and for TL, the linehaul portion) and adds the percentage of cost derived from the table on to that. Just like you audit line haul costs on freight invoices, it is also important to audit fuel surcharges.

Fuel matrices are generally built to adjust with every $.05 increase or decrease in the DOE diesel fuel index and are effective for any shipments tendered in a given week’s period of time.


Ken has 15+ years supply chain logistics experience, and is founder of www.Fillship.com.

TL and LTL prices have increased - here are some details

According to Logistics Management Magazine, TL and LTL rates increased 1.6% and 1.1% respectively. Attached are charts from the magazine.


http://logisticsmgm-pwf.texterity.com/logisticsmgm/201006/?pg=14&pm=1&u1=friend

Interesting quote from the article - "truckers remain under extreme cost pressures, so every opportunity for new surcharges will be seized"

Truckload Pricing and Fuel Trends - Update 7/14/10

Here is an update on fuel prices as of 7/14/10.

From the US Energy Information Administration - the projected average annual retail fuel prices are detailed in this link.

Link to: Detailed snapshot of current fuel indices from the EIA.

Updated Truckload Pricing and Fuel Data

Here is an update on fuel prices as of 6/17/10.

From the US Energy Information Administration - the projected average annual retail fuel prices are detailed in this link.

Link to: Detailed snapshot of current fuel indices from the EIA

The Truckload Price trends:

The Freight Transportation Services Index (TSI) rose 0.3 percent in April from its March level, rising for the third consecutive month, the U.S. Department of Transportation's Bureau of Transportation Statistics (BTS). BTS, a part of the Research and Innovative Technology Administration, reported that the Freight TSI index has risen 4.9 percent over the last 11 months, starting in June 2009, after declining 15.3 percent in the previous 10 months beginning in August 2008. The index has increased in nine of the last 11 months. The index started 2010 with a decrease of 1.4 percent in the first four months. For additional historic data, go to http://www.bts.gov/xml/tsi/src/index.xml.

The Freight TSI measures the month-to-month changes in freight shipments in ton-miles, which are then combined into one index. The index measures the output of the for-hire freight transportation industry and consists of data from for-hire trucking, rail, inland waterways, pipelines and air freight.

Transportation Pricing on the Rise - Survey

An excerpt from Supply Chain Today regarding the Freight Pulse 18 Morgan Stanley/ Logistics Today survey - by Dave Blanchard.

"According to FreightPulse 18, a semi-annual survey of preferred transportation modes conducted by equity research firm Morgan Stanley with Logistics Today, it’s expected that those shippers using rail carriers to move their freight will see a 2.5% hike in their rates through the end of 2010. Even so, rail carriers will see a 2.6% increase in the amount of goods shipped this year. Rail is generally the least expensive mode of domestic transportation, and volume growth is expected to be comparable to the 2003/2004 rebound."


Read the whole story...

Follow me on Twitter @kennethkowal

Additional Resource for Truckload/ Logistics Pricing Trend Information

I just came across this and it may be worth monitoring: http://www.transcoretrendlines.com/

Two good articles on pricing trends

In keeping with the theme - I came across two decent articles related to a freight industry pricing forecasts.

http://www.businessweek.com/ap/financialnews/D9FM1IMO0.htm


http://logisticsmgmtnewsroomnotes.wordpress.com/2010/05/11/higher-rates-are-coming-says-analysts/

Fuel Pricing Update 5.13.10

Here is an update on fuel prices as of 5/13/10.

From the US Energy Information Administration - the projected average annual retail fuel prices are detailed in the attched link.

Link to: Detailed snapshot of current fuel indices from the EIA

The Truckload Price trend from the BTS has not been updated since my last post.

First Post - Truck Pricing and Fuel Trends

Welcome to a new blog I have started to provide updated information on trends and forecasts related to truckload pricing and fuel costs in the US. The goal is to provide a quick look at data and information that is important to shippers of all sizes to assist with understanding what is happening in the marketplace and allow better forecasting and budgeting of transportation related costs.

From the US Energy Information Administration - the projected average annual retail fuel prices are forecast at $2.95 and $3.12 per gallon for 2010 and 2011, respectively.

Link to: Detailed snapshot of current fuel indices from the EIA

The Freight Transportation Services Index (TSI) rose 0.3 percent in February from its January level, rising for the second consecutive month, the US Dept. of Transportation Statistics (BTS) reported on April 14, 2010.

The sources of data are updated by the government monthly and this information will be updated around the middle of each month. Additional sources of relevant data will be added when possible. Ideas or comments for improving the content of the blog are appreciated.

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