Understanding the Carriers’ (FedEx, UPS and DHL) General Rate Increase (GRI)
For 2024, all three major carriers — UPS, FedEx, and DHL — announced a General Rate Increase (GRI) of 5.9%.
This represents a reduction from their 2023 GRIs:
- UPS: Down from 6.9% in 2023
- FedEx: Declined from 6.9% in 2023
- DHL: Reduced from 7.9% in 2023
The decrease in the GRI for 2024 suggests that these carriers are adjusting their rates to either remain competitive in the market or respond to shifting economic conditions. DHL has taken higher reduction in this year’s GRI compared to UPS and FedEx, indicating potential strategic shift in their pricing approach.
Although the General Rate Increase (GRI) for 2024 is set at 5.9% for UPS, FedEx, and DHL, this figure alone doesn’t fully capture the complexities of shipping costs. The GRI is just one component; surcharges and varying rates across different services add complexity to the overall cost structure. Shippers should adopt a detailed, strategic approach to navigate these changes effectively. Leveraging advanced tools and analytics will be crucial in understanding the full impact of these adjustments and in managing shipping costs more efficiently.
Smart strategies to effectively manage GRI
Navigating General Rate Increases (GRIs) requires more than just understanding the percentage hike. To manage the impact effectively, shippers should employ smart strategies:
- Analyze Rate Structures: Examine how the GRI affects different services and surcharges. Understanding these nuances will help in anticipating and mitigating cost increases.
- Optimize Shipping Solutions: Use sophisticated tools to evaluate and select the most cost-effective shipping options. Advanced analytics can reveal opportunities for savings.
- Negotiate with Carriers: Leverage your shipping volume and business relationships to negotiate better terms or discounts, potentially offsetting some of the GRI impact.
- Diversify Carriers: Explore alternative carriers or shipping methods to reduce reliance on any single provider and capitalize on competitive rates.
- Review and Adjust Shipping Strategies: Regularly reassess your shipping strategies and adapt them to the changing cost landscape to ensure ongoing efficiency and cost-effectiveness.
By applying these strategies, shippers can better navigate the complexities of GRIs and manage their shipping costs more effectively.