As we approach the end of the year, it’s time for shippers to start prepping for the impending FedEx 2021 GRIs. Starting Jan. 4, 2021, shipping rates for FedEx Home Delivery, FedEx Express (Domestic, U.S. Export, and U.S. Import), and FedEx Ground will increase by about 4.9 percent. Meanwhile, FedEx Freight reports an even larger increase of about 5.9 percent. However, Ground Multiweight, International Premium, and FedEx SmartPost haven’t announced any specific increases in rates at this point in time.
Impact of the 2021 GRIs
Despite these announcements, it’s important for shippers and other logistics professionals to understand that the impacts of the 2021 GRIs usually falls far from expectations. That being said, here are some of the ways these changes will influence the average shipper throughout the next year:
1. Cracking down on additional handling
Most carriers are not a fan of hauling larger packages around. They take up a lot of room, make the conveyance process more difficult, and are a struggle for couriers to manage. Given these added complications, FedEx has classified a new standard dimension of 105 inches for additional handling. This will officially go into effect on Jan. 18, 2021.
2. Heightening competition
Due to Amazon’s role in expediting the speed of today’s deliveries, shippers are having to work overtime just to keep up in the eyes of the consumer. No one understands this better than carriers like FedEx. This is why they’ve decided to further up the prices of their faster-than-ground express services for two-day and three-day shipments. Therefore, those looking to compete are going to have to shell out the cash.
3. Shifting ZIPs and rising surcharges
In comparison to this year’s DAS ZIP Codes, shippers should anticipate less extended and more standard DAS classifications in 2021. Also, most of the surcharges for high frequency items will increase by more than the average 4.9 percent that FedEx announced.
4. Changing late fees
Like UPS, FedEx now plans on charging shippers 6 percent late payment fees. Therefore, those that find it difficult to make payments within the allotted 15-day time span need to take this into account before heading into negotiations. If you’ve become accustomed to having that extra cushion of payment forgiveness, it might be time to begin leveraging freight auditing to avoid losing money.
5. Zoning services
Shippers that depend on distribution that takes place along one coast rather than two can expect to be hit hardest by new increases in longer zone shipping costs. By contrast, express services for shorter zones will experience very little difference in price.
6. Homing in on low weight ground packages
Similar to the carrier’s changes regarding larger packages, FedEx seems to also be especially homing in on smaller shipments ranging from 1 to 5 pounds. Overall, there will be a 6.44 percent increase in the ground minimum fee. However, this shift will vary with each shipper’s individual negotiations.
If any of these points directly affect your business, then you’ll probably feel these GRIs a lot more than the average shipper. Thus, that 4.9 percent is going to be a lot higher. So, make sure you and your budget are prepared to handle what’s in store.
About O’Neill Logistics
O’Neill Logistics is a leading 3PL with operations in Rancho Cucamonga, CA; Savannah, GA; and Newark/Monroe, NJ. We service many verticals including Garments, Fashion Accessories, Footwear, Furniture, Home Goods, & Electronics. Our services include omni-channel distribution and all value-added services. We focus on retail “drop shipment” fulfillment and item-level fulfillment services with same-day service offerings.
We have over 2 million square feet which are all state-of-the-art facilities, offer dray services to support the warehouses, and handle distribution to retailers and wholesalers.
Our main drive is to simplify your supply chain by delivering exceptional service and optimizing your operational performance. We aim to build, protect and foster strong business partnerships.
O’Neill’s reliable 3PL platform, combining sophisticated technology with robust, flexible processing designs and speed-to-market gateway models, was built by our management team of seasoned executives with backgrounds in transportation, distribution and technology across domestic and international supply chains.