November 18, 2015
Posted by Alicia Baumann

eCommerce Disruption: Shipping Rates Increase

CEO and Co-Founder Jeremy Bodenhamer recently wrote an industry thought piece published in Furniture World on how the recent FedEx and UPS shipping rate increases are directly impacting online retailers: eCommerce Disruption.

Several weeks ago, FedEx announced a price hike for delivery services, the second price hike of the year. FedEx and its main competitor, UPS, typically introduce price increases on an annual basis, so many dismissed this announcement as routine. Submerged in the official statement, however, was dramatic news: FedEx’s near doubling of the surcharge for “unauthorized packages” that exceed defined size requirements. Specifically, FedEx will charge a significant fee to ship items that are too large for its standard parcel infrastructure—a price adjustment that will hit furniture retailers particularly hard

At the root of this startling announcement is a continued rise in the number of residential deliveries and an inherent weakness in the existing U.S. parcel network. The transportation infrastructure in the United States was built to accommodate freight in standard sizes: four-by-four pallets, small cardboard boxes, uniform envelopes, and the like. These systems are not flexible enough to accommodate demands for larger and unorthodox shapes and sizes.

Read on to learn how CEO, Jeremy Bodenhamer, says you can proactively evaluate your delivery options without shipping rate increases eating away at your margins.

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