FedEx might have struck "peak" from its official lexicon, but let's not kid ourselves: the end-of-year holiday rush is a peak season in all but name. With FedEx's August 29 announcement of 2023 surcharges, one message rings loud and clear: brace yourselves for higher shipping costs. However, the world of transportation and logistics has more under its hood than just surcharges. Let's delve into what’s shaping this industry in 2023.
FedEx Sets the Stage with 2023 Surcharges
According to FedEx, the new surcharges in place from October through January aim to fortify service quality during the busy year-end period. A recent report by Supply Chain Dive detailed the new fees, heralding this as the first general rate increase (GRI) for the 2023 season. Notably, UPS is poised to follow, having already brokered a labor deal with the Teamsters.
Surcharge | Amount |
Additional handling | $6.95 |
Oversize packages | $73.00 |
Ground Unauthorized packages | $410.00 |
Demand | $1.60 - $2.60 |
Residential Delivery | See Fedex Peak Calendar |
Are there any disruptions in the global transportation industry?
- The Panama Canal’s Troubles: A Dry Spell to Remember
Climate change is not sparing the Panama Canal. A harsh dry spell, worsened by El Nino, has led authorities to reduce daily vessel numbers to 32. Joe Monaghan, Worldwide Logistics CEO, recently warned of a 15-day-or-more delay, a blow that is yet to ripple through the shipping ecosystem.
- The Turmoil Continues: Declining Volumes at West Coast Ports
Recent negotiations between the Pacific Maritime Association and the International Longshoremen and Warehouse Union have had repercussions. The Port of Los Angeles reported a 25.8% dip in processed TEU, and the Port of Long Beach a YoY decline of 26.4%. Despite these figures, port leadership remains hopeful.
- Procurement: The Unsung Hero of Emission Reduction
Robert Williams, Director of Procurement Sustainability at AstraZeneca, emphasized the critical role of procurement in controlling Scope 3 emissions during a Science Based Targets webinar. He argues that leveraging supplier networks can be a fast and efficient route to sustainability.
- Asian Ports Experience Surge in Blank Sailings
As global retailers try to shed excess inventory, blank sailings—unscheduled voyage cancellations—are climbing. This indicates carriers are facing economic pressure, exemplified by Hapag Lloyd’s first-half EBITDA dropping from $10.9B in 2022 to $3.8B.
- Air Cargo Takes a Backseat
Parcel giants FedEx and UPS are pulling back on air cargo. According to FreightWaves, FedEx reduced domestic flights by 9% in July, while UPS reported a 14% drop. This may be a reaction to persistently low parcel volumes, signaling an absence of the usual peak-season spike.
- DJI Expands Its Horizons into Delivery
Chinese drone manufacturer DJI is venturing into delivery with its newly-unveiled FlyCart30. Designed to carry up to 66 pounds of cargo at speeds close to 45 mph, this product could be a game-changer if it extends beyond the Chinese market.
Don't Just Adapt, Optimize with ClaimMe
With incoming surcharges, companies are seeking innovative strategies to boost resilience and performance in parcel operations. Platforms like ClaimMe offer a suite of software tools to help businesses navigate these turbulent times.
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