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Peak’s Hiring Frenzy is in Full Force, ’22 Surcharges Around the Corner

While carriers are busy hiring seasonal employees for the anticipated high peak season, you should be planning for their New Year surcharges.

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PARCEL CARRIER NEWS

FedEx
  • 🎄 During a ‘Face the Nation’ interview segment with CBS News, CEO Fred Smith gave an outlook on peak season from the carrier, stating “This year, we’re forecasting we will deliver 100 million more shipments in this holiday season than we did in 2019.” While speaking on hiring, Smith said “We’re ready, assuming that we can get the employees.” He went on to note that the carrier has nearly doubled the number of employment applications it processes since May, from 50,000 per day to 90,0000 per day, and added, “that’s very encouraging.”
  • 💰 It’s critical to keep an eye on peak season as its happening, but don’t forget what’s just around the corner, too. Here’s a roundup of surcharge changes that will take place after peak in January 2022:
    • Surcharges Going into Effect Jan. 3, 2022
      • Address correction: $18 to $19.50 (8.3%)
      • DAS Exp Resi: $4.70 to $5.20 (10.6%)
      • DAS Exp/Grd Ext Resi : $5.90 to $6.50 (10.2%)
      • Home Delivery: $4.30 to $4.80 (11.6%)
      • Adult Signature: $6.70 to $7.15 (6.7%)
      • Direct/Indirect Signature: $5.55 to $5.90 (6.3%)
      • Exp Resi Fee: $4.95 to $5.30 (7%)
      • Grd Resi Fee: $4.80 to $5.20 (8.3%)
    • Surcharges Going into Effect Jan. 24, 2022
      • Additional Handling Surcharge rates for U.S. Express Package Services and U.S. Ground Services will be determined based on the shipment’s zone
      • Oversize Surcharge rates for U.S. Express Package Services and U.S. Ground Services will be determined based on the shipment’s zone
  • Find more information about FedEx surcharges, including peak season surcharges.
UPS
  • The carrier announced positive earnings in its Q3 2021 Quarterly financial report. Notable highlights include:
    • Revenue: $23.2B (up 9.2% over the third quarter of last year)
      • U.S. Domestic revenue up 7.4% driven by a 12.0% increase in revenue per piece.
      • Fuel drove 270 bps (2.7ppts) of the revenue per piece growth rate.
      • Strong growth in global economy despite COVID-19, Inflation, and Inventory/Labor Shortages.
      • Demand for UPS services remains high with the pricing environment being firm for the quarter.
    • Operating Profit: $2.9B (up 22.6% compared to the third quarter of last year)
      • Operating profit increased and operating margins expanded in all segments; US Domestic up 28.1% YOY.
    • Net Income: $2.3B (up 19.0% compared to the third quarter of last year)
    • Diluted EPS: $2.65 (an increase of 18.3% over last year Q3 2020)
  • The carrier also held a seasonal employee hiring event, seeking to fill 60K positions (from package handlers, drivers, driver helpers, and personal vehicle drivers) to support anticipated peak season activity. The event spanned three days (Nov. 4-6) and was open to prospective job hunters across the country. It’s clear the carrier means business when it comes to acquiring seasonal workers, as the event is only one of several incentivized recruitment attempts like:
    • A $200 referral reward for employees that refer a successful and eligible hire.
    • A Earn and Learn program geared to incentivize student seasonal hires that stay with the carrier for at least 3 months – eligible employees can earn up to $1,300 toward college expenses (in addition to their hourly pay).

GRI & SURCHARGES

  • DHL eCommerce
    • DHL Express U.S. announced a 5.9% average rate increase for international services that is effective January 1, 2022. Some surcharge rates are changing as well. No new surcharges are being introduced for 2022. Read the announcement for more details.
  • FedEx
    • Beginning November 1, 2021, FedEx suspended the Money-Back Guarantee for certain services for the U.S., including First Overnight, Priority Overnight, Standard Overnight, First Overnight Extra Hours, Priority Overnight Extra Hours, Standard Overnight Extra Hours, International First, International Priority, and International Priority Freight. This suspension lasts until January 16, 2022. All other FedEx Express, FedEx Ground, and FedEx Freight services remain suspended until further notice. Read the announcement for more details.
  • UPS
    • Effective December 26, 2021, UPS Ground, Air, and International rates will increase an average of 5.9%. Many surcharge rates are increasing as well. Some notable changes are taking place with the Delivery Area Surcharge zip codes. There are 157 new zips being added to the DAS list. There are 317 zips moving from DAS to DAS Extended. There are 295 zips changing from DAS Extended to DAS. There are 211 zips being removed from the DAS list. Most notably, there are 2,692 zips that are being changed from DAS Extended to a new designation of U.S. 48 Remote Area Surcharge. This new designation comes with a significant price increase. While the charge for DAS Extended can range from $4.10 to $6.50, the fee for the new U.S. 48 Remote Area Surcharge is $12.00. These changes to the Delivery Area and Remote Area zip codes will be effective January 9, 2022.
    • Another increase in the UPS fuel surcharge index for U.S. Air and Ground is effective November 15, 2021. Both Air and Ground are increasing by 1.0%.
    • See the UPS Shipping Cost and Rates page for more information.
  • USPS
    • Proposed rates for 2022 have been published by the USPS. If approved, the new rates will take effect January 9, 2022. Read the announcement for more details.

LTL Carrier NEWS

  • The Journal of Commerce has reported its outlook on the LTL market for 2022, stating “Truck capacity and pricing seem unlikely to shift in shippers’ favor in 2022 as a surge in pent-up demand from consumers, retailers, and manufacturers looks increasingly probable.”
  • The Journal of Commerce has also reported that C.H. Robinson Worldwide is connecting a LTL fulfillment service from SPS Commerce to its Navisphere platform, which gives retail shippers access to C.H. Robinson’s network of LTL trucking companies. Shippers using SPS Commerce, a cloud-based retail services platform, will be able to view rates across multiple carriers, schedule pickups, and book shipments through Navisphere. In addition, the system will automatically create a bill of lading and shipping labels and provide tracking details in shipping notices for retailers expecting deliveries. The goal is to help shippers find capacity for retail freight headed to distribution centers and stores.
  • We continue to see an increase in chatter about LTL dynamic pricing. Not only is the Journal of Commerce reporting on it, but Banyan Technology and ArcBest think the solution will catch on with and benefit LTL shippers.


 Written by Cam Elliott


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