Transportation Update April 2021
Carrier Guarantee Service Refund
In March of 2020 all of the major domestic carriers eliminated service guarantees because of the huge spike in volume due to the COVID pandemic. Now, a year later, FedEx and UPS are bringing guaranteed delivery back for some services.
What is guaranteed delivery? FedEx and UPS offer a full money-back guarantee for selected services if the carrier makes a delivery later than their committed time estimate. This applies to shipments within the applicable services.
For FedEx, effective April 6, 2021 a money-back guarantee will be reinstated for select FedEx Express services for US domestic and US import/export shipments (US payors only). Services include:
FedEx First Overnight®
FedEx Priority Overnight®
FedEx Standard Overnight®
FedEx International First®
FedEx International Priority®
FedEx International Priority® Freight
Effective April 5, 2021 the UPS Service Guarantee will be reinstated only for the services below. The Service Guarantee remains suspended for all other UPS shipments from any origin to any destination.
UPS Worldwide Express services (UPS Worldwide Express Plus®
UPS Worldwide Express®
UPS Worldwide Express Saver®
UPS Worldwide Saver
UPS Worldwide Express Freight® Midday and UPS Worldwide Express Freight®).
Sustained Peak Season Charges in 2021
In 2021 rates are increasing by an average of 4.9%, which happens annually. This is separate from any specific seasonal rate increases that may happen specific times throughout the year. What’s not so common is seeing carriers sustain peak season charges beyond the holiday season.
UPS and FedEx have published annual rate increases along with continued peak surcharges for certain types of services.
UPS has assigned the biggest increases to the lowest weight packages, in most of its service offerings. Minimums are going up also on most services, particularly the slower services. ZIP code surcharges have also increased. Bigger impact changes: Additional handling – $3 per package; large package – $31.45 per package; international services – $0.11 per lb; Surepost – $0.30 per package
A full breakdown of UPS surcharges.
FedEx surcharges are effective January 18 until further notice. Bigger impact changes include: oversize charge – $30 per package; additional handling surcharge – $3.00 per package; smartPost peak surcharge – $0.75 per package.
A full breakdown of FedEx rate changes.
DHL published an 4.9% on general average shipment price increase for U.S. account holders as of January 1, 2021. Some optional services and surcharges will increase as well including the following: overweight piece — $94 per piece; oversize piece — $94 per piece; non-stackable pallet — $245 per piece.
USPS has raised shipping services product prices approximately 3.5% for Priority Mail service, and 1.2% for Priority Mail Express service. Shipping services price increases vary by product. An overweight/oversize surcharge of $100 will be added for packages that exceed the 70 lb. maximum weight limitation or the 130 inch length plus girth maximum dimensional size limit. This $100 surcharge must be paid by the shipper before the package will be delivered.
A full breakdown of USPS rate increases.
FedEx International Fees Increase
All FedEx Express international parcel and freight shipments incur a surcharge (as of April 6, 2020) due to global supply chain disruptions from the COVID-19 pandemic. Now, beginning April 19, 2021 the surcharge amount for some FedEx Express freight shipments originating in the US will increase.
The list of destination countries affected includes: Australia, Guam, Indonesia, Macau SAR-China, Malaysia, New Zealand, Philippines, Thailand and Vietnam.
To see a full list of FedEx surcharges and fees in 2021 see their rate sheet here.
To read more on this surcharge increase visit the FedEx site.
The Brexit Effect
After years of negotiations the UK finalized a trade deal that went into effect January 1, 2021. Below is a quick primer on how this deal is affecting shipping and fulfillment for companies dealing with UK export or import. See our Brexit overview for a more in depth understanding of this huge change in international shipping.
Existing tariffs will be eliminated on the trade of goods moving between the UK and the EU starting on January 1, 2021, depending on where shipments originate from.
The three most significant shipping scenarios the Brexit deal affects include: Goods originating in the UK destined for other EU markets and countries that have an agreement negotiated with the EU; cargo entering the UK from EU nations and countries that have trade agreements with the EU; and shipments from markets outside the EU that currently pass through the UK that are destined to other EU markets (and vice versa).
Customs clearance will now be required for all goods moving between the UK and the EU, including return shipments.
Other important changes sellers must consider include: an EORI Number (Economic Operator’s Registration and Identification) is now required; sellers need a UK VAT (Value Added Tax) separate from their EU VAT; the IOR is responsible and liable for customs declarations; and a proof of origin is required with the commercial invoice or other commercial documentation.
Sellers should review their customs paperwork and protocols to ensure they won’t incur stopped shipments or higher fees. A full list of Brexit rules are defined here.