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In the parcel industry, 2023 looks like revenge of the shipper

By December 8, 2022No Comments

It has been a difficult three years for parcel shippers. Base rates and accessorial charges have spiked to record levels. They’ve been told in blunt and public terms to pay up or pound sand. Many saw their volumes capped during the past two peak seasons. They’ve lost their money-back guarantees on everything but the parcel carriers’ most expensive services. It’s doubtful that guarantees will ever be restored across the board.

But the worm appears to be turning as 2023 nears. Shippers are expected to recapture the leverage that they held for years prior to the pandemic. With everything being negotiable, shippers will push hard to beat back the record general rate increases (GRI) that take effect over the next few weeks.

“It’s a buyer’s market,” said Jason Murray, co-founder of Shipium, a provider of multicarrier delivery options for e-commerce companies.

Carriers see it coming. They are in serious discussions with shippers right now, rather than waiting until a new year — which had long been accepted practice — in an effort to poach competitors’ volumes while holding on to their own traffic. Carriers are “anxious to engage” with new and prospective customers, said Gordon Glazer, who heads the postal practice at Shipware LLC, a consultancy. That’s a far cry from the attitude of the recent past, when large carriers like FedEx Corp. (NYSE: FDX) and UPS Inc. (NYSE: UPS) crammed price hikes and service mandates down shippers’ throats, spawning a lot of ill will that could come back to bite them.