As shipping rates rise, plan participants save

Rate increases at FedEx, UPS and DHL for 2008 were among the largest annual rate increases the companies have ever taken. All three companies’ ground package rates average 4.9 percent higher in 2008, with increases on air shipments even larger.

“That’s just an average,” cautions Harry Centa at PartnerShip, MRA’s partner in its Shipping Savings program. “Rates for certain shipment types increased more than that and others increased less. The package’s weight and size and the zone to which it is being shipped determine the real rate increase.”

Packages of 10 lbs. and less appear to be bearing the brunt of this year’s ground rate increase, according to Centa, while much heavier packages saw smaller rate increases.

In light of these increases, MRA’s Shipping Savings program makes even more sense to help members in the struggle against rising overhead. Participants save an average of $1.95 per package, and total savings have now exceeded $300,000 in the program’s two years.

Participants receive discounts of 5–25 percent on inbound and outbound ground and air shipments and even more on “less-than-truckload” shipping. A new 5-percent discount for FedEx Express shipments that are processed online will help ease the pain of rate increases on air shipments.

All three companies described the ground rate increases as a 6.9 percent average increase in its base rates, offset by a 2-percent reduction in its air fuel surcharge index.

However, fuel surcharges are based on a complex formula that includes the price of gasoline or jet fuel, so that fuel surcharges may actually be higher, despite a reduction in the index. Fuel surcharges in January 2008 for ground shipments were 6.25 percent higher than January 2007, PartnerShip reports.

Rates for air shipping (overnight and 2nd-day air) increased even more than for ground. Air rates vary among the major companies. Fuel surcharges also have increased for air shipments—an average of 19.5 percent.

For more information about MRA’s Shipping Savings program, or to sign up online, visit www.partnership.com/41mra.