First reported by Jack Ampuja in his article Under Pressure, the results of the annual “State of Logistics Report” issued by the Council of Supply Chain Management Professionals show that the cost of shipping parcels rose at an exorbitant rate of 15% in 2021, thanks largely to increased fuel surcharges and lasting supply chain challenges from the Covid-19 pandemic. Over the last five years, parcel freight costs have increased to an 11.4% compounded annual growth rate, vastly outpacing anything else in domestic transportation. Additionally, there don’t appear to be any changes in the near future to the broader market to slow the accelerated rate of cost increase.

Parcel Freight Giants Focused on Profitability


A lesser known but key challenge shippers should know is that the two parcel giants—FedEx and UPS—focus on customer profitability. Both companies have shown a willingness to sever ties with any account that cannot improve efficiency or will not accept a price increase. Shippers should not expect to move their freight from one provider to another for a more generous deal. Smaller regional parcel carriers, or the U.S. Postal Service (USPS), may be cost competitive but many shippers have found these options unreliable for a national solution.

Power of Volume and Efficiency

As parcel carriers look to maximize profitability, shippers who ship in volume and have efficient internal operations can control their costs.


Since these parcel carriers are not willing to negotiate rates for shippers with annual parcel expenditures of less than $10 million, one proven method small-to-medium sized shippers have to access improved pricing is to utilize the services of a logistics company that consolidates shipments across multiple shippers. Arizona MEP can help with introductions to these volume shippers to help you reduce shipping costs. As with parcel carriers, these consolidated freight shippers desire efficient clients. If your shipping department needs help addressing process improvements, the Arizona MEP can work with your team to create an action plan. Contact Arizona MEP at (602) 845-1256 or [email protected] to evaluate and compare shipping rates or learn about our services to help maximize internal efficiency.


Content excerpted from Under Pressure by Jack Ampuja.