Parcel shippers face an array of challenges as they navigate today’s supply chains, many of which are nearly impossible to predict. Though these “black swan” events play a major role in a company’s overall supply chain strategy, some challenges are constant, afflicting shippers regardless of the changing economic landscape. Among these are parcel carrier general rate increases, the rising cost of packaging materials, excess waste caused by too much air in a shipment, and the need to meet sustainability targets, especially as government regulations and consumer expectations increase.
Every year, parcel carriers such as FedEx or UPS will raise their prices by a certain percent, known as the general rate increase (GRI). But that just represents a base increase, says James Malley, co-founder and CEO of Paccurate, a packing intelligence platform company. In addition to the GRI, there will be surcharges and extra fees, which can make it complicated for shippers to see what the true rate increase will look like. Other factors such as the dimensional weight of a package and limited carrier options can also impact prices.
The materials used to pack boxes, such as corrugated cardboard or fiberboard, can present its own set of challenges, especially if boxes are packed inefficiently. In addition to this, shippers face increased pressure to reduce the carbon footprint of each package as much as possible. Not only do customers want to see smaller carbon footprints from companies, but government regulations are increasing in response to the climate crisis.
What’s certain is that shippers will be dealing with these challenges for the foreseeable future. Every year, costs will increase, waste will need to be reduced, and sustainability standards will determine how orders are packaged and shipped across the globe.
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