Transportation TL;DR June 2021

Monthly updates in transportation, including carrier changes, freight news (both LTL and small parcel), plus international shipping and trade compliance regulations.

FedEx Surcharge Increase

 Starting June 21, 2021 FedEx will increase peak surcharges on select shipments. Affected surcharges include additional handling, residential delivery, and ground economy. Oversized peak surcharges remain the same.

FedEx released a statement noting that the impact of COVID-19 continues to “generate elevated volumes, high demand for capacity, and increased operating costs.” In order to keep up with these and provide customers with good service, they are increasing the following surcharges. 

UPS International Peak Surcharges 

Effective May 23, 2021, some of the UPS international channels will experience increased rates. This includes shipments originating from Asia, including China Mainland, Hong Kong SAR, and Taiwan. See the full details on surcharges, dates and rates in the UPS rate sheet

USPS Proposed Rate Increase

In a May 28 announcement, USPS published a 2021 rate increase citing an average overall raise of 6.9% for the organization’s main services. The proposal is to have these rates increase beginning August 29, 2021 as part of a 10-year plan for the organization to achieve financial sustainability and service excellence. USPS still provides one of the world’s most affordable shipping rates. 

The statement reads, “First-Class Mail prices would increase by 6.8% to offset declining revenue due to First-Class Mail volume declines. In the past 10 years, mail volume has declined by 46 billion pieces, or 28%, and is continuing to decline. Over the same period, First-Class Mail volume has dropped 32%, and single piece First-Class Mail volume — including letters bearing postage stamps — has declined 47%.”

Here are the outlined proposed increases: 

Ocean Freight Rates Continue to Rise

Last year’s spike in ocean freight demand was thought to be a short-term reaction to shifting consumer demands due to the COVID pandemic. But as a 40-foot container from Shanghai to Los Angeles hit an all time high in April it appears these rates are here to stay for a while. In the last year the global supply chain has experienced disruptions such as container box shortages and port congestion that are also contributing factors. The cost of shipping a 40-foot container rose above $4,000 in April, up from $1,500 a year ago. The freight route with the biggest year-over-year increases is China/East Asia to North Europe. Experts are predicting that any relief from these freight disruptions may not come until 2022. 

Freight Delays Across the Industry

All forms of shipping are showing tough market conditions caused by shortages in drivers and warehouse workers. Experts suggest urging consumers to ship early because of transit time delays across the industry. 

There are still delays on exports into Canada due to a labor strike of 1150 dockworkers on April 26 in the Port of Montreal (Canada’s second largest port). 

Reports of port delays along the West Coast, may last through the summer and linger through the 2021 holidays. The congestion is said to be a result of 2020 backups caused by COVID shutdowns. Containers are expected to take 3-4 weeks to unload from ships, and there is no clear sign of improvement. 

If you are looking for fulfillment support, or need an expert to help guide your transportation strategy, reach out to get a quote. The DCL Logistics Transportation and Compliance team has decades of experience and expertise in all aspects of domestic and international logistics.