Preparation is the key to success. While each business has different needs, learn what businesses should know to strategize their shipping demands next year in 2020.
The holiday shopping season is approaching fast, and the shipping industry is getting ready to take on the full brunt of sales orders and packages. But are you prepared for what comes after this period in 2020?
While there is no one-size-fits-all strategy, there are still some things every business can keep in mind as you navigate through the next year.
Expansion of Delivery Operations for Major Carriers
In the venture to keep up with climbing volumes of e-commerce orders and competitors, both FedEx and UPS are increasing their capacity by operating seven days a week. While it was usual for the major shipping carriers to expand their capacity during peak months, both companies are making it official for year-round service starting in January 2020.
Previously, total days for delivery and total transit times would not include the weekend days in the standard. With the operating delivery expansion by FedEx and UPS, the effect on the transit standard is still unknown. Every company should be keeping an eye out for more details that may affect their business.
Additionally, to accommodate the rise in large packages from online shopping, FedEx plans to make significant operational changes to ensure the safe handling of these large packages by adding new facilities and equipment to current facilities. UPS will also offer its customers pick-up services seven days per week starting January 1, 2020. These changes will help you in providing your customers with flexibility when it comes to last-minute holiday deliveries.
Increase in Rates for Major Carriers
This year, FedEx announced its annual general rate increase to be effective on Jan. 6, 2020. FedEx Express, Ground, and Home Delivery will increase their shipping rates by an average of 4.9 percent, while FedEx Freight’s rates will increase by an average of 5.9 percent. Additionally, new surcharge ratings will increase, which emphasizes the carrier’s stance on penalizing large packages in its networks.
Early October of this year, the U.S. Postal Service proposed new postage rates to be implemented on January 26, 2020, which is still to be approved by the Postal Regulatory Commission. Overall rates for the individual shipping services, like Priority Mail Express and Parcel Select Ground, range from 1.9 to 2.8 percent. Interestingly, Parcel Select will be cheaper than Priority Mail for all weights and zones.
The Universal Postal Union (UPU), a United Nations agency that regulates international postal policies, declared in October this year thatindividual countries can set its own postal fees if the nation meets the shipping volume requirement. This will go into effect in July 1, 2020. Previously, the cost for foreign companies to ship a package into the United States was far less than what it costs for an American business to ship between states. The UPU’s decision will benefit U.S. manufacturers and small businesses that face foreign competition in the long run.
Reduce Shipping Emissions – IMO 2020
In effect on January 1, 2020, the International Maritime Organization passed marine shipping regulations to reduce sulfur emissions by over 80 percent by switching to lower sulfur fuels and cleaner alternatives. For businesses that use ocean freights, the costs of marine shipping will increase as the sector uses more costly fuels. Businesses will feel its effect immediately as the marine shipping sector rapidly adapt to the changes.
Is your supply chain management ready for 2020?
Every company has different shipping needs and processes, so there isn’t a catch-all strategy to prepare for 2020. For any business to be ready for the effects of these updates, it is crucial to collect all the data you can, like invoicing, dimensional, and transit data. Although the changes listed above may not relate to some operational data, keeping vigilance in data collection will only benefit you when unexpected policy changes or business challenges occur.