Carrier Rate Change 2013

2013 Carrier Price Changes

It’s that time again !!!!!!!!

NOTE DIFFERENT EFECTIVE DATES

Increases are not linearBy Service Type

or by Weight or By Zone

% inc rt vs lftZone 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8Letter 5.60% 5.59% 5.56% 5.52% 5.65% 5.61% 5.53%

1 5.13% 5.16% 6.45% 6.39% 6.42% 6.41% 6.43%2 5.03% 5.86% 6.41% 6.40% 6.43% 6.45% 6.46%3 5.05% 5.04% 6.41% 6.44% 6.49% 6.44% 6.46%4 5.05% 5.05% 6.48% 6.49% 6.49% 6.45% 6.50%5 5.34% 5.01% 4.01% 4.03% 4.05% 4.06% 6.49%6 5.15% 5.12% 6.44% 6.46% 6.46% 6.48% 6.46%7 5.08% 5.08% 4.07% 4.03% 6.48% 6.44% 6.46%8 5.03% 5.07% 4.03% 6.48% 6.46% 5.34% 6.46%9 5.12% 5.03% 6.43% 6.45% 4.03% 4.05% 6.48%

10 5.41% 5.24% 4.05% 4.04% 4.14% 4.15% 6.09%

Priority Overnight


1 5.85% 5.88% 6.88% 6.98% 6.90% 6.92% 6.95%2 5.97% 5.93% 6.99% 6.88% 6.95% 6.99% 6.91%3 5.79% 5.94% 7.00% 6.95% 6.94% 7.00% 6.95%4 5.81% 5.57% 6.98% 6.92% 6.96% 6.94% 7.00%5 4.59% 4.52% 4.07% 6.99% 6.93% 6.98% 6.98%6 4.55% 5.89% 6.98% 6.97% 6.93% 6.97% 6.97%7 5.81% 5.92% 6.94% 6.95% 6.96% 6.96% 6.99%8 5.90% 5.89% 6.99% 6.96% 6.98% 6.95% 6.95%9 4.55% 5.90% 6.98% 6.94% 6.95% 6.94% 7.00%

10 4.66% 5.93% 6.96% 6.98% 6.97% 6.96% 6.99%

Standard Overnight


1 7.40% 7.29% 7.37% 6.87% 6.82% 6.79% 6.93%2 6.86% 7.08% 7.28% 6.73% 6.91% 6.78% 6.94%3 7.32% 7.26% 7.19% 6.73% 6.87% 6.83% 7.00%4 7.46% 7.43% 7.36% 6.77% 6.85% 6.85% 6.96%5 7.23% 7.17% 7.34% 6.78% 7.01% 6.94% 6.85%6 7.32% 7.28% 7.33% 6.82% 6.90% 6.91% 6.92%7 7.41% 7.24% 7.25% 6.83% 6.92% 7.00% 6.88%8 7.46% 7.19% 7.24% 6.97% 6.98% 6.90% 6.93%9 7.36% 7.47% 7.37% 6.97% 6.99% 6.94% 6.90%

10 7.36% 7.29% 7.50% 6.98% 6.95% 6.94% 6.96%

2nd DayAM

2nd Day

In confusion there is profit

Your Business is not linearBy Service Type

or by Weight or By Zone

Priority Overnight

Standard Overnight

Ground 2nd Day

Knowing your business is crucial

Weight/Zone 2 3 4 5 6 7 8Letter 7 2 9 35 7 4 2

1 17 10 23 81 11 36 22 9 14 17 76 6 16 23 20 14 21 132 31 52 54 10 4 6 25 9 9 15 13 9 8 73 21 266 5 7 7 32 12 7 27 6 3 6 30 8 11 18 2 1 5 19 6 3 29 4 1 4 19 3 1310 4 1 5 31 8 11 3

Weight/Zone 2 3 4 5 6 7 8Letter 2 11 22 57 17 18 1

1 12 18 21 143 47 47 42 14 32 37 167 26 39 63 10 35 80 296 55 107 174 3 15 27 59 22 29 115 14 29 29 140 34 39 36 4 12 9 99 24 27 107 7 4 11 47 9 22 88 3 12 8 31 14 21 49 2 4 11 43 11 14 210 3 7 9 62 6 20 8

Weight/Zone 2 3 4 5 6 7 8Letter 2 3 2 26 14 15 21 17 32 42 260 53 130 32 20 27 41 237 46 74 13 24 41 54 405 96 229 184 4 15 22 86 35 57 35 23 45 41 247 45 98 96 15 19 35 141 38 65 127 11 14 16 126 27 43 48 11 11 16 75 16 31 99 9 14 14 68 18 33 810 11 19 21 91 18 36 6

Weight/Zone 2 3 4 5 6 7 81 971 861 1028 3896 639 957 642 735 658 814 3205 555 781 423 481 427 519 2025 384 544 634 306 314 375 1420 278 407 625 431 411 484 1974 348 529 656 246 246 275 1143 213 300 807 277 300 335 1227 222 331 458 235 182 267 960 178 300 619 176 184 275 958 474 267 44

10 189 177 212 827 143 277 56

There are services that can build a model for

you

Don’t assume the carriers have the same base rates

• Generally UPS Next Day is 3% less

• Next Day Air Saver 2%• 2day AM 3%• 2 day 3%• 3 day 13%

Carrier Year

Service Level 1

0.00Fuel Surchare:0.00%

Weight DiscountsZone 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8Letter 0.00%1 0.00% 12.25 12.30 12.35 12.45 14.15 14.75 16.502 0.00% 12.35 12.40 12.45 12.55 15.15 16.40 19.203 0.00% 12.90 13.10 13.80 13.85 17.55 18.40 21.704 0.00% 13.00 13.55 14.70 15.60 19.45 21.00 24.805 0.00% 13.10 14.15 15.50 17.05 22.05 23.15 27.806 0.00% 14.30 15.45 17.70 19.10 24.60 25.75 31.557 0.00% 14.40 16.95 19.10 20.50 27.30 29.10 34.658 0.00% 15.10 18.50 20.60 22.05 30.00 31.85 37.859 0.00% 15.80 19.15 21.95 23.80 32.15 34.95 40.7510 0.00% 15.90 19.25 23.15 25.60 34.15 37.60 43.95

Minimum Charge:

Carrier Year

Service Level 1

0.00Fuel Surchare: 0.00%

Weight DiscountsZone 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8Letter 0.00%

1 0.00% 7.50 8.65 9.30 10.65 13.35 14.75 15.552 0.00% 7.70 9.10 10.00 11.80 15.15 16.40 18.253 0.00% 8.40 9.60 10.95 13.10 17.55 18.40 20.854 0.00% 9.25 10.60 11.65 14.70 19.45 21.00 23.105 0.00% 9.85 11.35 12.75 16.05 21.65 23.15 25.456 0.00% 10.45 12.40 14.00 17.60 23.35 25.75 27.957 0.00% 10.80 13.40 15.10 18.80 25.30 28.55 30.708 0.00% 11.35 14.45 16.30 20.10 27.45 30.60 33.509 0.00% 12.05 15.35 17.35 21.35 29.45 32.70 36.1010 0.00% 12.75 16.00 18.30 22.80 30.95 35.00 38.70

Minimum Charge:

MINIMUM CREEP

YEARMinimum Charge Y/O/Y Increase %

January Fuel Surcharge Net $

2005 $3.62 2006 $3.80 4.97%2007 $4.00 5.26% 3.75% $4.152008 $4.20 5.00% 6.25% $4.462009 $4.57 8.81% 4.75% $4.792010 $4.84 5.91% 5% $5.082011 $5.17 6.81% 6.50% $5.512012 $5.49 6.19% 8% $5.932013 $5.84 6.38% Est 7.5% $6.28

49.33% 73.48%61% v 2005

Many contracts are set so that no discounts

will drop below the rate of a

Zone 2, 1 LB charge

Minimums

Do I really have a discount at all?

New Minimum is $5.84 before the fuel surcharge

0.00Fuel Surcharge: 0.00%

Weight DiscountsZone 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8Letter 0.00%

1 30.00% 4.09 4.36 4.49 4.68 4.90 4.96 5.052 30.00% 4.45 4.74 5.13 5.24 5.52 5.59 5.793 30.00% 4.52 4.95 5.40 5.57 5.85 5.99 6.394 30.00% 4.62 5.08 5.67 5.93 6.15 6.38 6.865 30.00% 4.75 5.13 5.89 6.17 6.38 6.65 7.226 30.00% 4.87 5.29 5.99 6.31 6.50 6.85 7.397 30.00% 5.09 5.43 6.09 6.45 6.68 7.03 7.608 30.00% 5.28 5.56 6.25 6.57 6.88 7.26 7.979 30.00% 5.38 5.69 6.34 6.69 7.03 7.64 8.4610 30.00% 5.56 5.71 6.44 6.87 7.32 8.16 9.02

Minimum Charge:

Many contracts are set so that no discounts will drop below the rate of a package

below the Zone 2, 1 LB charge

Example: Given a 30% discount, the cells in red would not receive the any or only some

of the discount

Minimums


5.84Fuel Surcharge: 0.00%

Weight Discounts Zone 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8Letter 0.00%

1 30.00% 5.84 5.84 5.84 5.84 5.84 5.84 5.842 30.00% 5.84 5.84 5.84 5.84 5.84 5.84 5.843 30.00% 5.84 5.84 5.84 5.84 5.85 5.99 6.394 30.00% 5.84 5.84 5.84 5.93 6.15 6.38 6.865 30.00% 5.84 5.84 5.89 6.17 6.38 6.65 7.226 30.00% 5.84 5.84 5.99 6.31 6.50 6.85 7.397 30.00% 5.84 5.84 6.09 6.45 6.68 7.03 7.608 30.00% 5.84 5.84 6.25 6.57 6.88 7.26 7.979 30.00% 5.84 5.84 6.34 6.69 7.03 7.64 8.4610 30.00% 5.84 5.84 6.44 6.87 7.32 8.16 9.02

Minimum Charge:

Many contracts are set so that no discounts will drop below the rate of a package

below the Zone 2, 1 LB charge

Look how much your rates are going up in

the weights where most of your

shipments fall

Minimums


Note to self: Ask for no minimum or lower minimum

% inc rt vs lftZone 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8Letter

1 5.88% 5.88% 5.88% 5.88% 5.88% 5.88% 5.88%2 5.88% 5.88% 5.88% 5.88% 5.88% 5.88% 5.88%3 5.88% 5.88% 5.88% 5.88% 6.10% 7.73% 7.42%4 5.88% 5.88% 5.88% 7.50% 8.42% 7.81% 7.67%5 5.88% 5.88% 6.86% 8.40% 8.08% 7.70% 7.68%6 5.88% 5.88% 8.14% 8.31% 8.42% 7.68% 7.59%7 5.88% 5.88% 7.98% 8.10% 8.28% 7.80% 7.25%8 5.88% 5.88% 8.00% 8.05% 8.24% 6.63% 6.36%9 5.88% 5.88% 7.87% 7.65% 8.39% 6.57% 6.40%

10 5.88% 5.88% 7.61% 7.65% 8.24% 6.58% 6.39%

This includes the benefit if the fuel surcharge does in fact go to 7.5% in January

There is a compounding of all these baked in fuel surcharges

UPS Sets 2012 Rates

Atlanta, November 18, 2011

New Pricing Takes Effect Jan. 2, 2012

UPS (NYSE: UPS) today released new published rates for 2012, including a net increase of 4.9 percent for UPS

Ground packages and a net increase of 4.9 percent on all UPS Air services and U.S.-origin international shipments.

The rate increase for UPS Ground shipments is based on a 5.9 percent increase in the base rate, less a 1 percentage point

reduction to the index-based ground fuel surcharge. The rate increase for UPS Air and international services shipments is

based on a 6.9 percent increase in the base rate, less a 2 percentage point reduction to the index-based air and

international fuel surcharge.

UPS Sets 2011 Rates


New Pricing To Take Effect Jan. 3, 2011

UPS (NYSE:UPS) today released new published rates for 2011, including a net increase of 4.9 percent for UPS

ground packages and a net increase of 4.9 percent on all air express and U.S. origin international shipments.

The rate increase for UPS ground shipments is based on a 5.9 percent increase in the base rate, less a 1 percent reduction

to the index-based ground fuel surcharge. The rate increase for air express and international shipments is based on a 6.9

percent increase in the base rate, less a 2 percent reduction to the index-based air and international fuel surcharge.

UPS Sets 2010 Rates


New Pricing, Fuel Surcharge Calculations Will Take Effect on Jan. 4, 2010

UPS (NYSE:UPS) today released new list rates for 2010, including an average increase of 4.9 percent for UPS

Ground packages and an average net increase of 4.9 percent on all air express and U.S. origin international

shipments.

The rate increase for air express and international shipments is based on a 6.9 percent increase in the base rate, less a 2

percent reduction in the air and international fuel surcharge index.

UPS Sets 2009 Rates Atlanta, October 17, 2008

New Pricing Takes Effect Jan. 5, 2009 UPS (NYSE:UPS) today released new list rates for 2009, including an average increase of 5.9 percent for UPS Ground packages and an average net increase of 4.9 percent on all air express and U.S. origin International shipments.

UPS Freight announced a general rate increase of 5.9% for 2009.

The rate increase for air express and international shipments is based on a 6.9 percent increase in the base rate, less a 2 percent reduction in the air and international fuel surcharge index.

In effect your firm may be paying 25% in fuel surcharges

FUEL

Ground AirFedEx 2010 2011 2012 2010 2011 2012 UPS

Jan 5.00% 5.50% 8.00% 7.00% 9.00% 13.00% 12.50%Feb 5.00% 6.00% 7.50% 6.50% 10.00% 11.50% 11.50%Mar 5.50% 6.50% 7.50% 7.50% 11.00% 13.00% 11.50%Apr 5.00% 7.50% 8.00% 7.00% 13.00% 14.00% 14.00%May 5.50% 8.50% 8.50% 8.50% 15.50% 14.50% 14.50%Jun 6.00% 9.50% 8.50% 10.00% 16.50% 14.50% 14.50%Jul 6.00% 9.50% 8.00% 8.00% 15.00% 12.00% 12.00%Aug 5.50% 9.00% 7.00% 7.50% 15.00% 10.00% 10.00%Sept 5.50% 8,5% 7.00% 7.00% 15.50% 11.50% 11.50%Oct 6.00% 8.50% 8.00% 8.00% 14.50% 13.50% 13.50%Nov 5.50% 8.50% 8.50% 8.50% 14.00% 14.00% 14.00%Dec 6.00% 8.50% 8.50% 10.00% 14.00% 13.50% 13.50%

AVERAGE 5.54% 7.29% 7.92% 7.96% 13.58% 12.92% 12.75%

Run that by me again about how the

Carrier bakes in some of the fuel surcharge into the base rate

Don’t assume carriers have the same fuel surcharge

Accessorial ChargesYear Ground Residential Surcharge Increase Air Residential Surcharge Increase DASC air DASR air2006 $1.75 $2.10 $1.30 $2.102007 $1.85 5.71% $2.20 4.76% $1.40 $2.202008 $1.95 5.41% $2.30 4.55% $1.50 $2.302009 $2.05 5.13% $2.40 4.35% $1.60 $2.402010 $2.20 7.32% $2.50 4.17% $1.70 $2.502011 $2.45 11.36% $2.75 10.00% $1.85 $2.752012 $2.55 4.08% $3.00 9.09% $2.00 $3.002013 $2.80 9.80% $3.20 6.67% $2.15 $3.25

Just an exampleThere are lots of accessorial increases

OF CONCERN

Notes to Self

Note to self: Note to self: Rate increases are not linearRate increases are not linearNote to self: Note to self: Your business is not linearYour business is not linearNote to self: Note to self: No two customers will be impacted the same wat No two customers will be impacted the same wat

because the announcement of “average” increases is because the announcement of “average” increases is meaningless since there is no “average” shippermeaningless since there is no “average” shipper

Note to self: Note to self: Build a model of your business using pivot tables or a Build a model of your business using pivot tables or a third party so that you know your book of business as well as third party so that you know your book of business as well as your carrier doesyour carrier does

Note to self: Note to self: Increases are negotiable, even if you have a contract Increases are negotiable, even if you have a contractNote to self: Note to self: Understand your use of accessorials!Understand your use of accessorials!Note to self: Automate and simplify the use of less expensive, Note to self: Automate and simplify the use of less expensive,

guaranteed services that can fulfill the recipients need for speedguaranteed services that can fulfill the recipients need for speedNote to self: Consultants can get you a 49% better discount than Note to self: Consultants can get you a 49% better discount than

you can achieve on your ownyou can achieve on your own

Make no assumptions based on the “average” numbers announced

If you liked what you heard• Jerry Hempstead• 1724 Buckhorn Pl• Orlando Fl 32825• 407-342-3825• [email protected]

mailto:[email protected]

Carrier Rate Change 2013

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