Fluctuating fuel prices are the controlling factor to increased pricing within the shipping industry. Large delivery services, such as FedEx and UPS tack on a fuel surcharges per shipping request. It would seem that as fuel prices decrease, the fuel surcharge rates would do the same. However, recent rates compared with fuel prices have shown the opposite.
Regardless, the fluctuating prices of fuel rates have either increased or remained steady, with no sign of a decrease in sight. This has become a growing concern for those who frequently use shipping services. The shipping industry leaders claim it is due to the heightened amount of residential deliveries.
Before online shopping, products were delivered straight to stores in larger shipments and in fewer frequencies. As more people switch to online shopping, deliveries are shipped straight from factory to consumer. This shrinks the amount of deliveries needed for stores, while increasing the number of single item deliveries.
Online shopping has become the norm for most retailers as consumers depend on store websites to fulfill their shopping needs. This is the reason for an emphasis in investing in website development. Websites have to be easy enough for consumers to use, while remaining effective enough to get customers to purchase online.
As consumerism continues to evolve, there will be an increase in residential deliveries. As a result, there are more stops made along each delivery route. This takes up more driver time and fuel which presents the issue of added costs. The prices of fuel fluctuate throughout the year. As we approach the typical increase in summer fuel prices, it can be expected that surcharges will rise.
Let’s use two of the largest carriers, UPS and FedEx, as examples. Both companies have announced their ground shipping fuel surcharge price for July 2016. Starting July 4th, 2016, there is an expected fuel surcharge rise of .5% for both of these large carriers. That would bring the UPS surcharge up to 5.00% and the FedEx surcharge up to 3.75%. It is important to note that the changes in surcharges are reflective of average U.S. diesel prices of the month prior. So the UPS and FedEx surcharges would be reflective of June 2016.
Increased surcharges are only one reason companies are turning to small, local couriers for their deliveries. AER Logistics does not ad fees for residential deliveries and surcharge rates. Give us a call today at 1-800-639-3900 for a quote on your next local or nationwide delivery and see how you can save.