UPS, FedEx issue rate increases for 2009
By David Hannon -- Purchasing, 12/11/2008 2:00:00 AM EST
Logistics giants UPS and FedEx issued their 2009 rates increases just as their market went into transition with DHL's announcement it would pull out of the U.S. express market (see story, p. 13). UPS' rates include an increase of 5.9% for ground packages and a 4.9% rate hike on all air express and U.S. origin international shipments, based on a 6.9% rate increase and a 2% decrease in fuel surcharge. FedEx matched UPS' ground hike of 5.9% and express by 6.9%.
But despite the carrier's price increases and DHL's exiting the market, some market watchers say this is a very good time to negotiate rates with small parcel carriers. The overall freight market's malaise coupled with the small parcel market's uncertainty in the wake of the DHL move has carriers very hungry for volume. Robert W. Baird analyst Jon Langenfeld said he has concerns about carriers' ability to raise prices as demand remains weak.
In a recent interview, Bill Knasinski, vice president of parcel and logistics solutions at Pittsburgh-based Genco, told Purchasing that now is the best time in recent history to negotiate with small parcel carriers. "Carriers are being very aggressive. Most of our clients have seen over 20% cost reductions [from small parcel providers]," Knasinski told Purchasing.
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