I’m Jay Kent, managing director of SLB Performance, a consulting firm that helps companies reduce supply chain costs, implement BI tools, and improve in-stock and customer service. After 25 years of leading some of the most complex supply chains in the industry, I began advising companies in multiple industries and verticals. It’s important to understand the market to mitigate costs and improve efficiencies. So, twice a month, I’ll share parcel news and thoughts. Be sure to hit the subscribe button to receive the latest newsletter in your LinkedIn notifications.
****A new blog post – How Shippers Should Prepare for 2025 Parcel Rate Increases – is posted on the SLB Performance website.****
- According to an October 15 entry in the Federal Register, the USPS is now proposing an end to dual shipping labels altogether, stating that the policy “no longer serves the interests of the Postal Service,” but offering no additional clarity on its reasoning beyond that. The USPS will be accepting written comments on the proposed rule change through November 14. If it’s approved, it would go into effect on January 1, 2025.
- The United States Postal Service and the National Association of Letter Carriers came to a tentative agreement on a new contract. The agreement, which covers work from 2023 until 2026, provides cost of living adjustments throughout the length of the contract. Carriers also receive three 1.3% raises, with two of them applied retroactively.
Some mail carriers, however, are against the tentative agreement.
- Amazon is shutting down Amazon Today, a service that offers same-day delivery from mall and brick-and-mortar retailers. The bulk of the program will be shut down by Dec. 2. Select retail partners will be able to continue fulfilling orders with Amazon Today through Jan. 24, 2025.
FedEx and UPS
- UPS and FedEx shipping discounts in Q3 led to unexpectedly low ground delivery rates, according to the Q4 TD Cowen/AFS Freight Index .
- FedEx Whitepaper – Bridging the e-Commerce Divide: Meeting Consumer Demands with Merchant Offerings – Over half of those surveyed (57%) prioritize free shipping when making an online purchase, even more than finding the best prices (54%). In fact, 81% of shoppers are willing to increase their spending to meet a retailer’s free shipping threshold.
- Nimble announced the successful closure of a $106 million Series C funding round led by FedEx.
- UPS has closed nine of its buildings this year and shifted more volume to automated hubs. The closures contributed to an 8% improvement in parcels per workforce hour. “While 8% might not seem like a big number, that translated into an efficiency gain of 11 million hours,” UPS EVP and CFO Brian Dykes said on the Q3 earnings call.
Q3 UPS earnings were reported on Oct. 24.
- UPS– UPS Releases 3Q 2024 Earnings
- Reuters– UPS returns to profit, revenue growth ahead of crucial holidays; shares jump
- CNBC– UPS tops quarterly profit estimates on rebounding volumes; shares jump
- Transport Topics– UPS Sees Profit Growth for First Time in Nearly Two Years
That’s it for now. Comments are always welcome. Reach out if you’d like to learn how to lower or even possibly eliminate any parcel fees. Stay tuned for the next newsletter on Oct 16. Don’t forget to hit the subscribe button to ensure you receive it in your LinkedIn notices. In addition, if you like what you’re reading, sign up to receive additional insights and analysis via emails twice a month – DM me for more info.
-Jay