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Parcel, LTL, truckload, ocean, rail, air freight. ](https://www.lojistic.com/carrier-connectors) - [ Industries Served Retail, eCommerce, 3PL, manufacturing, and more. ](https://www.lojistic.com/industries-served) - [ Roles Most Impacted & How Supply chain & logistics, procurement, finance leaders. ](https://www.lojistic.com/roles-most-impacted) - [ Use Cases How Lojistic helps manage and reduce shipping costs. ](https://www.lojistic.com/use-cases) - Platform Features - [ Global Analytics & Reporting Predictive analytics and scenario modeling for all carriers globally. ](https://www.lojistic.com/shipping-analytics-software) - [ Rate Optimization & RFPs Tech-powered data prep, strategy, and rate impact analyses. ](https://www.lojistic.com/rate-optimization-rfps) - [ Parcel and Freight Audit & Payment *+PAY* Carrier refunds and payments automated and made simple. ](https://www.lojistic.com/freight-audit-and-payment) - [ GL Coding & ERP Sync Automatically code shipping costs down to the order level ](https://www.lojistic.com/gl-coding-erp-sync) - [ Lojistic API & App Integrations Easily integrate normalized shipping data to your business systems. ](https://www.lojistic.com/api-app-integrations) - [Pricing](https://www.lojistic.com/pricing) - [About](https://www.lojistic.com/about) - [Company](https://www.lojistic.com/company) - [Culture](https://www.lojistic.com/culture) - [Careers](https://www.lojistic.com/careers) - [Partner Programs](https://www.lojistic.com/partner-programs) - [Security](https://www.lojistic.com/security) - [Media](https://www.lojistic.com/media) - [Ratings & Review](https://www.lojistic.com/reviews) - [Videos](https://www.lojistic.com/videos) - [Blog](https://www.lojistic.com/blog) - [Contact](https://www.lojistic.com/contact) [Create Free Account](https://app.lojistic.com/demo/connect-carrier?activeStep=create-account&trackDemo=false) [View Demo](https://app.lojistic.com/demo) [ Log In](https://app.lojistic.com/demo/account/login?trackDemo=false) UPS & FedEx Take a Hardline Stance With Their Customers =========================================================== ![Icon denoting blog author information in Lojistic’s content layout](/images/pages/blog/icon-author.svg)Rich Harkey ![Calendar icon used to display blog post dates on Lojistic’s website](/images/pages/blog/icon-calendar.svg)December 06, 2021 UPS and FedEx have always been willing to meet their customers’ expectations - or at a minimum - they’ve always been willing to hear them out and address certain customer requests for discounts or better rates as a means to maintain a solid client-vendor relationship. **But the dynamic between carriers and shippers has changed drastically in the past few months.** **Here’s What You Can Learn From This Post:** 1. The current state of the Carrier - Shipper relationship 2. “Attractive” shipping characteristics the carriers are looking for 3. How UPS & FedEx feed off each other to gouge shippers 4. Current carrier negotiation tactics **How Are UPS & FedEx Dealing With New Customers?** Both carriers have been hesitant to take on new business. In some cases, UPS and FedEx have turned down the opportunity to provide service to “new” shippers. Only those businesses with “attractive” shipping characteristics in the eyes of the carrier have been able to secure reasonable pricing. “Reasonable” - of course - is relative to the current marketplace. [Currently, shipping rates are at an all-time high. And it’s only going to get more expensive for businesses to ship in 2022. ](https://www.lojistic.com/blog/ups-fedex-peak-holiday-shipping-2021) We detailed [What’s Wrong With UPS Contract Optimization and Negotiation](https://www.lojistic.com/blog/ups-contract-optimization) in this recent blog post. The same is still true, but the issues now apply to both carriers. **What Are Some of the Attractive Shipping Characteristics the Carriers are Looking For?** UPS and FedEx are both struggling to deliver residential packages. [FedEx has even resorted to rerouting 600,000 each day(!)](https://www.lojistic.com/blog/fedex-labor-shortages-cause-for-concern), which is causing longer time-in-transits . It’s been written about, discussed and dissected in many places (including on this blog), but the seismic shift to residential delivery during the pandemic has had a profound effect on [parcel](https://www.lojistic.com/blog/why-analytics-matter) industry as a whole. If your business ships the majority of its packages to residential destinations, the carriers are less interested in your business right now, and they’ll be difficult to negotiate with. However, if you’re shipping the majority of your packages to commercial destinations, either by [ground or air](https://www.lojistic.com/dashboards/air-vs-ground), there may be an opportunity to improve your rates. Not sure how attractive your shipping profile is to the carriers? [Identify your rate improvement potential now. When you create a free Lojistic account](https://app.lojistic.com/demo/connect-carrier?activeStep=create-account&trackDemo=false) all your historical shipping data is transformed into powerful analytics you can leverage in your next carrier negotiation. ![]() **UPS and FedEx Know There’s Zero Competition in the Marketplace Right Now** It’s a carrier’s market. UPS and FedEx have more leverage now than ever before because there’s more demand than there is supply, and both are taking a similar approach. They’re made it clear they’re only interested in the most profitable business, and those that have “unattractive” freight are left feeling like they’re being punished. When you’re one half of a duopoly, it’s pretty easy to manipulate the marketplace knowing there’s no repercussions for high prices and sub-optimal service. For example, UPS knows that the shipper (aka you) has little-to-no alternative when considering alternatives to FedEx. You either continue dealing with inconsistent pickups, slow deliveries and deteriorating customer experience with FedEx, or you can agree to a steep rate increase if you’re “lucky” enough for UPS to “accept” you. While the issues may be different, the same principle applies to UPS shippers when they’re looking to make the switch to FedEx for better rates and/or service. Both carriers are stretching the capacity of their networks, so any new business that they agree to will come at a premium price. **Are There Alternatives To UPS or FedEx?** Yes, USPS is an option for some businesses, DHL is another and so are [regional carriers](https://www.lojistic.com/blog/regional-carriers) - however - all other options come with their own limitations. If you are looking into an alternative to UPS or FedEx, Lojistic can help support you in making the right decision for your business. ![]() Transform your historical shipping data into powerful insights by creating a [free Lojistic account](https://app.lojistic.com/demo/connect-carrier?activeStep=create-account&trackDemo=false). Once you have a better understanding of who you are as a shipper, you’ll be better equipped to meet your strategic shipping objectives - whether that’s [reducing costs](https://www.lojistic.com/dashboards/cost-reduction-opportunities) or reducing transit times. Lojistic will help you see what’s possible. **Are Carriers Willing to Negotiate with Their Current Customers** Unless your business’ shipping profile is considered “desirable” in the eyes of the carrier(s), probably not. We’ve received first-hand reports of carrier representatives making demands (i.e. automatic-debit as payment method) in order to keep discounts where they’re at. And those who declined were presented with a rate increase. In other cases, where businesses have approached the carriers asking for improved discounts, they’ve been countered with HIGHER rates. It’s an unprecedented approach to a client-vendor relationship. Imagine constantly raising prices for your customers while lowering the standards of your product and service. You’d probably be out of business pretty quickly. Yet, the carriers have taken that approach while continuing to post historically high profits quarter-after-quarter for nearly two years. UPS and FedEx will point to their long-standing relationship with your business as a negotiation tactic, when it benefits them. But when shippers talk about the personal relationship they’ve built with their carrier rep - there’s little to no movement in rate and/or service improvements. It’s not much of a relationship when it’s one-sided. **What Can I Do To Lower Shipping Costs For My Business** Despite the current environment, Lojistic’s cost-savings automation and [shipping analytics](https://www.lojistic.com/shipping-analytics-software) platform can help you get better rates and reduce shipping overspend. Before attempting to negotiate [better rates](https://www.lojistic.com/rate-optimization-rfps) or bigger discounts with your carrier, [create a free Lojistic account.](https://app.lojistic.com/demo/connect-carrier?activeStep=create-account&trackDemo=false) ![Rich Harkey Headshot](https://www.lojistic.com/assets/public/users/rich.png) Author Rich Harkey Rich Harkey Senior Strategy Manager Rich Harkey is a results-driven professional with extensive experience in the logistics and supply chain industry. As the Senior Strategy Manager at Lojistic, Rich leverages over three decades of expertise to help businesses improve their shipping strategies and reduce costs. With a deep understanding of the requirements of shippers and the operational intricacies of carriers, he excels in everything from optimizing business rules and managing carrier invoices to negotiating carrier contracts. Rich's comprehensive knowledge of the logistics industry, combined with his strategic insights and passion for data analysis, has enabled thousands of companies to gain visibility into their shipping expenses, driving impactful results. [« Previous Post](/blog/ups-next-day-air-residential-delivery-commitment-time-change) [Next Post »](/blog/ups-and-fedex-announce-5-9-general-rate-increase-for-2022) **Lojistic Blog** [Recent Posts](https://www.lojistic.com/blog) | [Categories](https://www.lojistic.com/blog/categories) Why Lojistic ---------------- - [All-Inclusive. Zero Cost. ](https://www.lojistic.com/pricing) - [All Modes. All Carriers. 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