Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
For ground parcel shippers, it's about to get more expensive to be long.
Within 30 days, any shipment moving on UPS Inc.'s or FedEx Corp.'s domestic ground networks will be charged a $10.50 "additional handling fee" if the longest side of the shipment exceeds 48 inches. Currently, the fee isn't imposed until the length of a parcel's longest side exceeds 60 inches. The long side's absolute maximum length is 108 inches.
At FedEx, the change takes effect June 1. At UPS, it kicks in June 6. The moves to shrink the maximum length that is subject to the surcharge follow policies that took effect Jan. 1 to hike the so-called additional handling fees to $10.50 from $9.
The most recent edict marks the seventh price increase of some type applied by UPS in the past 18 months, and the sixth imposed by FedEx, according to Thomas Andersen, vice president of LJM Consultants, a firm that audits FedEx and UPS invoices for clients and handles contract negotiations with the carriers. Andersen's comments appeared late last week in the industry trade magazine Parcel.
The two firms have a near-monopoly over the business-to-business ground parcel market and a very strong—though not nearly as dominant—position in business-to-consumer deliveries. They have moved in virtual lockstep during the past seven years in imposing rate increases, as well as new accessorial charges—or modifications to existing ones—for services rendered beyond basic pickup and delivery.
Both companies said the recent adjustments are needed to offset the costs of handling irregular-shaped shipments through their ground delivery networks. E-commerce has broadened the ordering bases for millions of companies, among them producers and retailers of large, outsized products that traditionally were sold in stores but can now be ordered online. A growing number cannot be processed through the firms' mechanized systems because they were designed and built to handle smaller, lighter shipments with routine dimensional characteristics. As a result, shipments with a specific combination of dimension, size, and weight require special handling and incur additional costs, the companies said.
Fred Smith, FedEx's founder, chairman, and CEO, told an industry conference last October that in visiting one of the company's ground hubs he was struck by the number of unconventional shipments that had been ordered online. Smith cited kayaks as a prototype of such consignments that were difficult, if not impossible, to run through FedEx's conveyance system. In general, the online availability of so many traditionally store-bought items such as mattresses and desks poses a handling challenge for parcel carriers.
It is unclear how many shipments will be affected by the changes. The types of products that could be exposed include skis, golf clubs, baseball bats, and other commodities that are dimensionally long but not very wide. In a separate e-mail, Andersen of LJM said most shippers will be impacted to some extent, but some in specific industries will be affected more than others. Businesses that designed packaging to comply with the 60-inch length threshold will now need to modify boxes to comply with the 48-inch requirement, he said. "We have several clients that have requested shipping data to help them identify products to eliminate, due to this change," Andersen said.
Jerry Hempstead, who runs a transport consultancy that bears his name, said the revenue from the changes would be relatively incremental. Still, the moves feed what Hempstead called an "addiction" on the carriers' part to satisfying the increasing demands from investors and analysts for new sources of growth.
A balky shipper may initially be able to negotiate prices, terms, and an effective date, Hempstead said. However, at some point the carriers "extract (the fees) from everyone, and laugh all the way to the bank," he said.
Hempstead expects that a year from now the carriers will shrink the applicable surcharge length to 36 inches from 48 inches. In what would be a more significant move, he predicted FedEx and UPS would reduce to 139 each firm's respective "volumetric divisor" used to calculate dimensional pricing on domestic air and ground shipments. Because shippers generally pay the higher of dimensional or actual weight prices, reducing the divisor would be tantamount to a decent-sized rate increase.
After a parcel's cube is calculated by multiplying length, width, and height, it is divided by the volumetric divisor to get the dimensional weight. Under the current divisor formula, a 1-cubic-foot box measuring 1,728 cubic inches would yield dimensional pricing equal to an 11-pound shipment. However, a shipment priced under a lower divisor of 139 would yield pricing equal to a package weighing 12.4 pounds.
The reduction to 139 would bring the domestic divisors in line with each firm's divisor used to price international shipments, Hempstead said.
Editor's Note: An earlier version reported that the changes apply to UPS' U.S.-Canadian ground shipments. It applies only to domestic U.S. shipments. We regret the error.
Online merchants should consider seven key factors about American consumers in order to optimize their sales and operations this holiday season, according to a report from DHL eCommerce.
First, many of the most powerful sales platforms are marketplaces. With nearly universal appeal, 99% of U.S. shoppers buy from marketplaces, ranked in popularity from Amazon (92%) to Walmart (68%), eBay (47%), Temu (32%), Etsy (28%), and Shein (21%).
Second, they use them often, with 61% of American shoppers buying online at least once a week. Among the most popular items are online clothing and footwear (63%), followed by consumer electronics (33%) and health supplements (30%).
Third, delivery is a crucial aspect of making the sale. Fully 94% of U.S. shoppers say delivery options influence where they shop online, and 45% of consumers abandon their baskets if their preferred delivery option is not offered.
That finding meshes with another report released this week, as a white paper from FedEx Corp. and Morning Consult said that 75% of consumers prioritize free shipping over fast shipping. Over half of those surveyed (57%) prioritize free shipping when making an online purchase, even more than finding the best prices (54%). In fact, 81% of shoppers are willing to increase their spending to meet a retailer’s free shipping threshold, FedEx said.
In additional findings from DHL, the Weston, Florida-based company found:
43% of Americans have an online shopping subscription, with pet food subscriptions being particularly popular (44% compared to 25% globally). Social Media Influence:
61% of shoppers use social media for shopping inspiration, and 26% have made a purchase directly on a social platform.
37% of Americans buy from online retailers in other countries, with 70% doing so at least once a month. Of the 49% of Americans who buy from abroad, most shop from China (64%), followed by the U.K. (29%), France (23%), Canada (15%), and Germany (13%).
While 58% of shoppers say sustainability is important, they are not necessarily willing to pay more for sustainable delivery options.
Schneider says its FreightPower platform now offers owner-operators significantly more access to Schneider’s range of freight options. That can help drivers to generate revenue and strengthen their business through: increased access to freight, high drop and hook rates of over 95% of loads, and a trip planning feature that calculates road miles.
“Collaborating with owner-operators is an important component in the success of our business and the reliable service we can provide customers, which is why the network has grown tremendously in the last 25 years,” Schneider Senior Vice President and General Manager of Truckload and Mexico John Bozec said in a release. "We want to invest in tools that support owner-operators in running and growing their businesses. With Schneider FreightPower, they gain access to better load management, increasing their productivity and revenue potential.”
Terms of the acquisition were not disclosed, but Mode Global said it will now assume Jillamy's comprehensive logistics and freight management solutions, while Jillamy's warehousing, packaging and fulfillment services remain unchanged. Under the agreement, Mode Global will gain more than 200 employees and add facilities in Pennsylvania, Arizona, Florida, Texas, Illinois, South Carolina, Maryland, and Ontario to its existing national footprint.
Chalfont, Pennsylvania-based Jillamy calls itself a 3PL provider with expertise in international freight, intermodal, less than truckload (LTL), consolidation, over the road truckload, partials, expedited, and air freight.
"We are excited to welcome the Jillamy freight team into the Mode Global family," Lance Malesh, Mode’s president and CEO, said in a release. "This acquisition represents a significant step forward in our growth strategy and aligns perfectly with Mode's strategic vision to expand our footprint, ensuring we remain at the forefront of the logistics industry. Joining forces with Jillamy enhances our service portfolio and provides our clients with more comprehensive and efficient logistics solutions."
In addition to its flagship Clorox bleach product, Oakland, California-based Clorox manages a diverse catalog of brands including Hidden Valley Ranch, Glad, Pine-Sol, Burt’s Bees, Kingsford, Scoop Away, Fresh Step, 409, Brita, Liquid Plumr, and Tilex.
British carbon emissions reduction platform provider M2030 is designed to help suppliers measure, manage and reduce carbon emissions. The new partnership aims to advance decarbonization throughout Clorox's value chain through the collection of emissions data, jointly identified and defined actions for reduction and continuous upskilling.
The program, which will record key figures on energy, will be gradually rolled out to several suppliers of the company's strategic raw materials and packaging, which collectively represents more than half of Clorox's scope 3 emissions.
M2030 enables suppliers to regularly track and share their progress with other customers using the M2030 platform. Suppliers will also be able to export relevant compatible data for submission to the Carbon Disclosure Project (CDP), a global disclosure system to manage environmental data.
"As part of Clorox's efforts to foster a cleaner world, we have a responsibility to ensure our suppliers are equipped with the capabilities necessary for forging their own sustainability journeys," said Niki King, Chief Sustainability Officer at The Clorox Company. "Climate action is a complex endeavor that requires companies to engage all parts of their supply chain in order to meaningfully reduce their environmental impact."
Supply chain risk analytics company Everstream Analytics has launched a product that can quantify the impact of leading climate indicators and project how identified risk will impact customer supply chains.
Expanding upon the weather and climate intelligence Everstream already provides, the new “Climate Risk Scores” tool enables clients to apply eight climate indicator risk projection scores to their facilities and supplier locations to forecast future climate risk and support business continuity.
The tool leverages data from the United Nations’ Intergovernmental Panel on Climate Change (IPCC) to project scores to varying locations using those eight category indicators: tropical cyclone, river flood, sea level rise, heat, fire weather, cold, drought and precipitation.
The Climate Risk Scores capability provides indicator risk projections for key natural disaster and weather risks into 2040, 2050 and 2100, offering several forecast scenarios at each juncture. The proactive planning tool can apply these insights to an organization’s systems via APIs, to directly incorporate climate projections and risk severity levels into your action systems for smarter decisions. Climate Risk scores offer insights into how these new operations may be affected, allowing organizations to make informed decisions and mitigate risks proactively.
“As temperatures and extreme weather events around the world continue to rise, businesses can no longer ignore the impact of climate change on their operations and suppliers,” Jon Davis, Chief Meteorologist at Everstream Analytics, said in a release. “We’ve consulted with the world’s largest brands on the top risk indicators impacting their operations, and we’re thrilled to bring this industry-first capability into Explore to automate access for all our clients. With pathways ranging from low to high impact, this capability further enables organizations to grasp the full spectrum of potential outcomes in real-time, make informed decisions and proactively mitigate risks.”