TranzAct Technologies
Two Minute Warning
August 28, 2024

Minimize these UPS, FedEx and DHL surcharges, and LTL pricing changes to protect your profits

BY MIKE REGAN, CO-FOUNDER OF TRANZACT
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It’s 100% certain that you’re about to get hit with parcel surcharges, LTL pricing changes and scheduling challenges that will cut into your margins, but we can help you reduce or eliminate the damage if we get to work quickly.

If your company has parcel and LTL shipments, the latest surcharges and pricing adjustments from parcel and LTL carriers threaten your margins (and bonus calculations) from today through year end and on into 2025.

We can help you navigate through the storm and avoid the painful expense surge that can derail your profit plan, but we need to act quickly. Click here to set up a quick conversation and/or read more below about the specific challenges that will cause you to lose sleep and earnings.

Number One Issue, Again: Peak Season Surcharges from FedEx, UPS, DHL and every other parcel carrier

The Christmas shipping season is already underway, including new peak season surcharges from that will bump up parcel costs 8-10%. We all knew this annual obstacle course was coming and NOW IT’S HERE. Actually, it’s even more of a challenge than in many other years, because the length of the Peak Season has been extended and the rates for surcharges have been increased. If we start working together quickly, we can implement some strategies to mitigate the impact.

Number two Issue: New LTL classifications threaten margins. As if these immediate challenges weren’t enough, the NMFTA’s proposed changes to LTL classifications could lead to increased costs for LTL shippers and major errors in the freight quotes generated for customers. Misquoting freight could result in lost margin if freight quotes to the customer are less than freight actually paid.

For example, if you quote freight charges for an order at $250, and the LTL charges turn out to be $300, or $350, what are you going to do? Will you issue a separate invoice and bill the customer the extra $50 to $100? Or will you “eat the difference” to avoid alienating a customer. When those mistakes occur, shippers will be swallowing substantial expenses that turn profitable business into losses. These changes will be rolled out over the next six to nine months, so it’s important to start now to protect your costs and profitability.

But wait, there’s more!

Beyond the disruption and cost you’re about to experience with fourth-quarter shipments, large and small, there are three major developments that will be affecting both costs and access in the days ahead.

Canada’s Rail Strike is a U.S. Problem: Canada’s railroads and unions are back at the bargaining table, but shippers will be relying more on truckload capacity as a safety valve and that increased demand will have a ripple effect for both truckload and LTL shippers in Canada and the United States.

U.S. Port Shutdown: We’re less than five weeks away from a potential shutdown of U.S. ports on the East Coast, which will lead to canceled deliveries and higher costs. Right now, it looks like the odds are about 50/50 that we’ll have a strike and we’ll all be dealing with major business threats if that happens.

The Red Sea is closer than we thought: Houthi terrorists are causing major disruptions in oil shipping and other ocean transport, which is already causing significant delays and price increases that are being transferred to domestic U.S. markets. We can expect more vessels to bypass the Red Sea and go around the Cape of Good Hope, adding to transit times, capacity, and insurance costs that will be passed on to U.S. companies.

Warning: This year’s business plan could get derailed very quickly, but we can help you protect your business and your customer relationships by acting now. TranzAct has the experience, expertise and technology to help you analyze your options and select the alternatives that protect your company’s supply chain and bottom-line profitability.

The Solution: send me an email or stop by our calendar to schedule a one-on-one chat to begin working on the solutions you need. We’re ready to make you more successful, because that’s our number one focus.